BSI Bank Faces US$394 Million Charges for 1MDB Fraud

The legal case by 1 Malaysia Development Berhad (1MDB) against BSI bank will continue after the High Court of Singapore refuses the bank’s request to dismiss the case.

“Brazen Sky” subsidiary of 1MDB is trying to get back “US$394 million (S$515 million)” from BSI bank, which had lost due to fraudulent activity through bank accounts that were shut down since 2017.

Claim of 1MDB to Ensure Accountability

A representative for the 1MDB board stated, “We are pleased this application has been denied and are committed to holding accountable the institutions and individuals involved in misappropriating money from Malaysia’s sovereign wealth fund, while ensuring the recovery and restitution of these assets back to the Malaysian people.”

1MDB claimed in a statement in May that BSI violated the rules and regulations by not handling account-related activities and failing to follow the instructions of Brazen Sky.

1MDB has stated legal action as a key element of ongoing international efforts “to get back billions of dollars” obtained from illicit activities.

Massive Misappropriation of Money

Approximately “more than US$7.5 billion” was misappropriated from 1MDB  and its affiliated companies, as stated in the legal filing of Singapore’s High Court in May.

Involvement of  Major Individuals

Two businessmen on Aug 28 in Geneva were accused of fraud for being involved in a scam of  “US$1.8 billion” by a Swiss court to “Defraud 1MDB”.

According to a representative’s statement for the Federal Criminal Court of  Switzerland, “Tarek Obaid”, the chief executive of PetroSaudi, has been sentenced to “seven years”  for being involved in criminal activities such as money laundering and handling resources dishonestly along with his colleague “Patrick Mahony” who has been sentenced for “six years.”

The court issued a statement later and declared that all the long years in prisons decided for accused individuals were justified to “the very high amounts involved, the intensity of the criminal activity,” and the prisoners’ “selfish motive.”

Read Also:

• Singapore Banks Investigate Rich Clients After A $3 Billion Money Laundering Case
• UAE Central Bank Imposes Lender With $1.6m fine for AML violations
• Two Bankers Face Charges in Singapore’s $2.3 Billion Money-Laundering Case

Financial Penalties and Assets Seizure

Furthermore, the court also released an order for individuals to reimburse the money laundered from 1MDB, return a portion of seized amounts, and have some of their belongings seized.

Appeal for Defense

The court made the following decision: the request for immediate custody of both individuals was rejected as there was insufficient evidence to determine the risk of flying to other countries.

Both men have the right to “appeal for verdicts and sentences” to save them from penalties before they take effect.

Reaction from Both Lawyers

Her client would appeal, as stated by  “Ms Myriam Fehr-Alaoui,” Obaid’s lawyer.

She added, “Many essential elements presented by the defense were not taken into consideration, and we deplore that.”

Mahony’s lawyer “Mr. Laurent Baeriswyl” stated, “The verdict is shocking, and Mahony will also appeal.”

Final Verdict Of Court

Without giving any justification, the court rejected all the evidence supporting the defense and ruled that it “took no account” of the testimony that released him.

The decision was again in favor of Swiss prosecutors as previously, in 2022, they proved charges and penalized Credit Suisse. Through all these actions, they want to portray Switzerland as serious about punishing the criminals who are involved in illicit activities and have no tolerance for financial offenses.

1MDB’s Ongoing Efforts

The main body in “defrauding of 1MDB” named “Jho Low” is still on the run.

Two bankers from “Goldman Sachs Group” were engaged in the scam, and to compensate the Malaysian government, the bank paid “US$2.5 billion”  as a settlement amount in 2020

The board of 1MDB was happy with the decision and released a statement saying, as it explains, both individuals “will face justice for their role in embezzling and defrauding the people of Malaysia”.

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