Switzerland indicts Petrosaudi duo over US$1.8b 1MDB fraud

 

The Swiss Attorney-General’s Office (OAG) has filed an indictment against two Petrosaudi managers over allegations that they helped misappropriate US$1.8 billion (RM8 billion) from 1MDB to enrich themselves and others.

This is over a transfer of US$1 billion in 2009, and another US$830 million between 2010 and 2011.

The indictment at the Swiss Federal Criminal Court appears to be in reference to the Good Star stage of the 1MDB scandal.

A press release by the OAG yesterday stated that the two accused had schemed with fugitive businessperson Low Taek Jho to set up a joint venture for a fake project in Turkmenistan that would end up defrauding 1MDB.

This led to the 1MDB board of directors to agree to transfer US$1 billion for the joint venture, of which US$700 million were diverted into a Swiss account beneficially owned by Low.

Wanted fugitive Jho Low

From that US$700 million, the OAG said, Low transferred US$85 million to one of the accused, and the latter then transferred US$33 million to the other accused.

While the OAG did not name the two persons accused, this appears to be in reference to Tarek Obaid and Patrick Mahoney.

Lawyer Muhammad Shafee Abdullah had, during the 1MDB trial, produced documents showing that Tarek and Mahoney received US$85 million and US$33 million respectively from funds that went through Good Star.

Meanwhile, the OAG said the balance of US$300 million from the September 2009 1MDB transfer had been channelled to Petrosaudi for the company’s benefit.

Further, it said, the two accused also helped Low defraud 1MDB of another US$830 million between September 2010 and October 2011 as part of an Islamic loan that followed the fake joint venture.

Funds used to acquire real estate, jewellery

According to the OAG, the funds that the duo received were used to acquire real estate in Switzerland and London, jewellery and private equity to develop Petrosaudi activities that generated substantial income, as well as to maintain a lavish lifestyle.

Meanwhile, in an apparent reference to complaints by whistleblower Xavier Justo against the Petrosaudi bosses of blackmail, extortion, false imprisonment and others, the OAG said it decided not to proceed with prosecution.

It cited, among others, that elements of the reported offences had not been met, that the right to file a complaint is time-barred, or that the matter reported did not give rise to reasonable suspicion under the law.

However, it noted that this decision can be appealed with the Swiss Federal Criminal Court.

Last year, Tarek’s name appeared multiple times in the trial against former prime minister Najib Abdul Razak, who is facing four charges of using his position to obtain bribes amounting to RM2.3 billion from 1MDB funds and 21 charges of money laundering involving the same amount.

One witness told the court that Najib was photographed with Tarek (bottom photo, second from the right) on board the yacth RM Elegance in Nice, France in Aug, 2009.