Switzerland’s top prosecutor said $4 billion may have been misappropriated from state-owned companies in Malaysia, a significant escalation of an investigation into transactions around government fund 1MDB.
The Swiss attorney general’s office said its investigation revealed indications that funds have been misappropriated and said it was looking into four cases of potential criminal conduct. It said some of the funds had been transferred to Swiss accounts held by former Malaysian public officials and current and former officials from the United Arab Emirates.
The comments represent the most detailed allegations yet of wrongdoing around 1MDB. The fund, set up by Malaysian Prime Minister Najib Razak in 2009 to help strengthen the Southeast Asian country’s economy, also faces a continuing probe by the U.S. Federal Bureau of Investigation and had been the subject of several inquiries in Malaysia.
Representatives of the United Arab Emirates, the Malaysian prime minister and 1MDB couldn’t immediately be reached for comment.
The Swiss attorney general’s office said it would formally ask Malaysia for assistance in the investigation in the coming days. It also said the cases it was pursuing reflected a sophisticated effort to take the money, “each involving a systematic course of action carried out by means of complex financial structures.”
Swiss authorities have spent five months investigating unnamed people tied to 1MDB over bribery of public officials, misconduct in public office and money laundering. Officials worried, however, that Malaysia’s decision this week to halt an investigation into the transfer of $681 million into Mr. Najib’s private bank account after clearing him of wrongdoing could hamper their own probe.
“We are very concerned,” Swiss Attorney General Michael Laubertold The Wall Street Journal on Friday. “We have found evidence of suspicious money transfers linked to 1MDB going through Swiss financial institutions, and we believe that it is very important that it is shared with the Malaysian authorities.”
Earlier this week, Malaysian Attorney General Mohamed Apandi Ali said the money transferred to Mr. Najib’s account was a legal donation from Saudi Arabia’s royal family and cleared the prime minister of any wrongdoing. The Malaysian Anti-Corruption Commission subsequently said it would seek a review of that decision
A Saudi government official said the Saudi ministries of foreign affairs and finance had no information about such a donation being made.
Swiss officials said they became interested in the activities around 1MDB due to concerns the country’s banking system may have been used for illegal activities.
In July, The Wall Street Journal reported that an earlier Malaysian probe found the funds had entered Mr. Najib’s account through banks including a Singapore branch of Zurich-based Falcon Private Bank AG, as well as other companies and entities linked to 1MDB. Falcon hasn’t been accused of wrongdoing and has said it is cooperating with the investigation.
The Swiss said they have frozen tens of millions of dollars in assets at unspecified Swiss banks as part of their probe. The Wall Street Journal has reported that the investigation has focused on transactions made using Falcon, which is owned by an Abu Dhabi sovereign-wealth fund that has done business with 1MDB. The fund hasn’t responded to requests for comment.
In its announcement Tuesday, the Malaysian attorney general’s office said it had no evidence that the Saudi donation to Mr. Najib “was given as an inducement or reward for doing or forbearing to do anything in relation to his capacity as a Prime Minister.” All but $61 million of the money was eventually returned to the Saudis, Malaysian authorities said.
Following that announcement, the Swiss attorney general’s office said it contacted the Malaysians directly and asked for mutual assistance between the agencies to continue, and for evidence unearthed by the Swiss to be considered.
source: Wall Street Journal