Bribery and Money Laundering Linked to 1MDB Scandal

The Swiss Attorney General’s office has announced the launch of an investigation into six individuals suspected of bribery and money laundering, in addition to the ongoing investigation on 1MDB, Malaysia’s state fund that was founded by former Malaysian Prime Minister Najib Razak, and former counterpart, Syracuse Research Corporation, (SRC) a defense contractor.

The six individuals under investigation have not been named but include two former 1MDB officials, two officials from PetroSaudi International, a Saudi energy group, and two former officials from the Abu Dhabi sovereign funds.  PetroSaudi, linked to 1MDB through an energy joint venture from 2009 to 2012, has denied the accusations and stated that none of its officials were involved in the incident.  Two banks, BSI SA Bank and Falcon Private Bank, are also suspected of being involved with the scandal and have been under an ongoing investigation since 2016.  Funds with suspected links to 1MDB have been confiscated from these banks in 2016, resulting in both banks appealing the verdict.  Malaysian authorities have also reached out to authorities in Macau to detain Low Taek Jho, a Malaysian financier who evaded authorities in Hong Kong and was identified by both Malaysia and the US for playing a critical role in the 1MDB scandal.  Funds from 1MDB have also leaked into the US, with Tim Leissner, former Goldman Sachs banker, looking to plead guilty for involvement in a scheme to steal billions from 1MDB.

Swiss authorities suspected that money raised for developmental projects by 1MDB were stolen and used for personal gain.  Lauber’s office stated, “All or part of the financing obtained is alleged to have been used for other purposes, most particularly for the personal enrichment of the persons involved.”  A meeting in Kuala Lumpur between Lauber and his Malaysian partners determined that $7 billion from 1MDB and SRC was flowing into Switzerland’s financial systems including others, from 2009 to 2015.  In response, Lauber froze 400 million Swiss francs, ($404 million USD) and is planning on returning some of the money to Malaysia after the investigation is over.


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