A Swiss federal court convicted two former PetroSaudi executives on the event date and sentenced them to six and seven years in prison for their roles in embezzling more than $1.8 billion from Malaysia’s 1MDB fund.
The ruling marks another major chapter in the long-running 1MDB scandal, one of the largest financial corruption cases in modern history. According to the supplied report, the Swiss Federal Criminal Court found that Patrick Mahony and Tarek Obaid had helped create the appearance that PetroSaudi was backed by the Saudi government, even though it was not. That false impression helped persuade 1MDB’s board to enter into the scheme in 2009, after which prosecutors said the men defrauded the fund.
The court’s sentence was severe. Obaid received seven years in prison and Mahony six years. The judges also ordered assets, including property in Switzerland and the United Kingdom and more than $240 million held in bank accounts, to be confiscated and returned to 1MDB. That restitution element matters because the case has always been about more than punishment: it is also about recovering money and tracing it through a maze of offshore transactions.
Prosecutors said the defendants were not acting alone. The report says they worked with fugitive Malaysian financier Jho Low, who advised former prime minister Najib Razak and is widely associated with the scandal. It also says the scheme initially extracted $1 billion from 1MDB so the fund could take a stake in the venture, before a further $830 million was taken from 2010 to 2011 as part of an Islamic loan arrangement.
The court heard that bank accounts in Switzerland were opened from September 2009 onward to help launder the money. Prosecutors said the funds were used to buy properties, jewelry and private equity, and to maintain a lavish lifestyle. The packet also says the money supported PetroSaudi business development and generated sizeable income for the accused. Those details are central because they show how the court linked the embezzlement to concrete financial and personal gains rather than abstract wrongdoing.
The convictions are important for 1MDB itself. The board welcomed the verdict and said the ruling meant the two men would face justice for their role in looting the fund. It also described the judgment as another step toward recovering harm done to the people of Malaysia. That public response reflects how 1MDB has remained a national grievance as well as a criminal case.
The scandal has already spread far beyond Switzerland. The report says Malaysian and U.S. investigators estimated that $4.5 billion was stolen from 1MDB in total, implicating figures including Najib and senior executives at Goldman Sachs. The case has crossed multiple jurisdictions, with related proceedings in the United States and asset recovery efforts continuing across countries.
This latest judgment also matters because it reinforces the legal record around how the scheme worked. The court did not merely say money went missing; it accepted that the defendants built a fraudulent joint venture, opened accounts to move the proceeds and used the system of shell arrangements and banking channels to conceal the source of the money. That makes the case a blueprint for understanding how large-scale financial crime can move across borders.
For Malaysia, the value of the ruling is partly symbolic and partly practical. Symbolically, it confirms that another court has judged the 1MDB case to be a deliberate fraud rather than a series of accounting errors. Practically, the confiscation order could help return at least part of the stolen funds.
The scandal has already helped topple political power in Malaysia, and the report notes that public fury over the affair contributed to the loss of power by Najib’s ruling coalition in 2018. More than a legal milestone, the Swiss verdict is another reminder that the 1MDB story remains unfinished. Even years after the first allegations surfaced, the effort to punish the defendants and recover the money is still moving through the courts.
