Swiss court jails 1MDB fraudsters over US$1.8 billion theft from Malaysia state fund

The court said after the ruling that it had rejected the prosecutors’ request for the pair to be immediately detained, saying there wasn’t enough concrete evidence to determine they were a flight risk.

Both men can appeal the verdicts and the sentences before they come into force. Myriam Fehr-Alaoui, Obaid’s lawyer, said that they would appeal. “Many essential elements presented by the defence were not taken into consideration and we deplore that,” she said.

The verdict is “shocking” and Mahony will also appeal, his lawyer Laurent Baeriswyl said. The court refused to hear all the witnesses for the defence without providing justification, and rendered a decision that “took no account” of evidence that exonerates him, according to Baeriswyl.

The board of 1MDB issued a statement saying that it welcomes the decision as it means the pair “will face justice for their role in embezzling and defrauding the people of Malaysia”.

“We will continue to pursue those responsible for the looting of 1MDB and recover our nation’s rightful assets, wherever they may be,” it said.

Mahony and Obaid, classmates from a Geneva private school, were accused of creating a sham oil exploration company as early as 2009 through which they stole more than US$1.8 billion in 1MDB funds. Working with Low, they managed to hoodwink 1MDB executives into believing that their company Petrosaudi had a mandate to negotiate on behalf of a Saudi king which they never had, while claiming the rights to a Caspian Sea oilfield that they never controlled, prosecutors alleged.