Lawyers for defendants criticise Swiss PetroSaudi/1MDB trial as complex, biased
Published 03-Apr-2024 by Nick Kochan
Regulatory Intelligence News
Lawyers for fund manager Patrick Mahony, one of the defendants in the fraud and money laundering 1MDB trial in Switzerland, have fought back against the Swiss Federal prosecution indictment, calling it complex and biased.
“The indictment is the culmination of a totally biased and incomplete investigation,” said Laurent Baeriswyl, the lawyer representing Mahony at the opening of the trial on April 2.
The matter of 1MDB was too complex for a single trial, Baeriswyl said.
The indictment has accused Mahony and his co-defendant Tarek Obaid of aggravated money laundering, fraud, forgery and corruption. Prosecutors allege Mahony made at least $37 million from laundering $1.8 billion that 1MDB passed through PetroSaudi International, a privately owned oil exploration and production company.
Prosecutors allege Obaid made $580 million at the height of the laundering activity, between 2009 and 2011. PetroSaudi was a joint venture Obaid had formed with Prince Turki bin Abdullah Al Saud, a son of the late King Abdullah of Saudi Arabia in 2010. Mahony is described as chief investment officer.
“The Public Ministry of the Confederation, the prosecutors, never sought to understand the facts or listen to Patrick’s explanations. If it had wanted to, it could have done that which sound logic indicates and envisage multiple hearings to consider all the questions that would help understand the facts in all their complexity,” Baeriswyl said.
Detailed money flows
The indictment contains a detailed analysis of money flows through multiple Swiss banks. Swiss prosecutors allege that 1MDB, a sovereign wealth fund in Malaysia, lost $3 billion as a result of the laundering scheme. 1MDB collapsed in 2016. Some £4.4 billion passed through multiple Swiss bank accounts set up by Mahony between October 2009 and July 2015.
Prosecutors allege he knew the funds were of a criminal origin and the money was moved to hinder its “identification, discovery and confiscation”, according to the indictment.
One laundering scheme of $500 million received from 1MDB in 2010 worked particularly well, according to Mahony, cited in an email included in the indictment.
“Right now, we are in a good situation because we have this money in a clean, proper and legal way so there is nothing anybody can do to us. Our issue now is with how to move it around.”
Referring to Jho Low, the fugitive investment banker behind much of 1MDB’s financing, by his nickname, “Chunk”, Mahony says he had a better way to move the money than Low.
“We can get them to do this our way for once as we hold the funds”.
Mahony moved the money through multiple accounts over two weeks. It landed on Oct. 1 at the bank account called Good Star, whose beneficial owner was Jho Low.
NatWest Banker named
On April 26, 2011, £1.2 million was transferred to PetroSaudi’s UK account to pay employees including Rick Haythornthwaite, who will become chairman of NatWest Group on April 15. Haythornthwaite, who gave prosecutors an interview, had advised on the valuation of a Turkmen oilfield, according to prosecutors.
Mahony and Obaid deny the charges.
The trial, which continues, is expected to last a month.