Two directors of the company Petrosaudi were given heavy sentences this week by Switzerland’s federal criminal court in Bellinzona, reported RTS. The court ordered two men to repay the Malaysian sovereign wealth fund 1MDB nearly two billion US dollars, an amount made up of the missing US$ 1.75 billion plus 5% interest. In addition, they were sentenced to long prison sentences, one for seven years and the other for six. The court demanded further payments of CHF 450 million and CHF 12 million from the pair.
Between 2009 and 2015, the accused allegedly organised the opening of bank accounts in Switzerland and other locations to mask the origin of money misappropriated from the fund, according to the prosecutor.
Both of the accused men are based in Geneva and hold Swiss nationality, however, one is originally from Saudi Arabia and the other from the United Kingdom.
1MDB is a Malaysian sovereign wealth fund that was ostensibly created to improve the Malaysian economy. In reality, much of the money that flowed into it went missing, some of which was spent on lavish parties, diamonds, real estate and a luxury boat by Jho Low, a Malaysian fugitive who has since been stripped of his Malaysian citizenship. Former Malaysian Prime Minister Najib Razak, who is already in prison for his role in the scandal, was advised by Low. Malaysian and US investigators believe a total of $4 billion was diverted from the fund.
The fund retained the bank Goldman Sachs to raise much of the money that flowed into 1MDB through large bond issues. In 2022, a former Goldman Sachs banker was convicted by a US jury of corruption related to his role in helping loot hundreds of millions of dollars from 1MDB. Some of the bonds issued by 1MDB were guaranteed by the Malaysian government, which means Malaysian taxpayers are on the hook to repay these bonds.
The verdict can be appealed. So it remains to be seen whether the men sentenced in Switzerland, who were tried for of commercial fraud, aggravated criminal mismanagement and aggravated money laundering, will actually end up in prison.
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