Switzerland Probes $800 Million 1MDB Fraud, Ponzi Scheme

Swiss prosecutor, 1MDB, SRC, Ponzi scheme, Najib Razak, Jho Low, Riza Aziz

Switzerland's prosecutor says it has evidence that $800 million in Malaysian state money from natural resources made its way to Swiss banks. The prosecutor is also looking into a Ponzi scheme involving state fund 1MDB and a subsidiary.

The news follows a high-level visit from Swiss officials including Attorney General Michael Lauber to Singapore: Switzerland's prosecutor wants Malaysia to provide further legal assistance in a billion-dollar graft probe of state fund 1MDB and into SRF, a subsidiary.

Officials led by U.S. prosecutors allege that billions in state funds were siphoned off to buy everything from a $33.5 million Central Park duplex, expensive impressionist art since seized in a Geneva freeport as well as to bankroll the film «The Wolf of Wall Street».

Ponzi Scheme

The Swiss prosecutor has redoubled efforts to get information from Malaysia, sending another request following several earlier this year. 

«The sum of $800 million appears to have been misappropriated from investments in natural resources made by the SRC sovereign fund,» the Swiss prosecutor said in a statement on Wednesday, referring to a subsidiary of 1MDB.

«It is suspected that a 'Ponzi' scheme fraud was committed to conceal the misappropriations from both the SRC fund and from 1MDB.»

Pressure on Malaysia

The prosecutor said the aim of the latest request for help from Malaysia is to obtain further evidence to corroborate the misappropriation and Ponzi allegations, and to give victims of the alleged fraud a means of legal recourse.

It also serves to rev up the pressure on Malaysia, which unlike Singapore does not appear to have been forthcoming with providing assistance to Switzerland in the investigation.

Malaysian Prime Minister Najib Razak isn't identified in U.S. judicial documents, but his position is identified and his step-son Riza Aziz and close associates including Jho Low are.

Four People, One Bank

U.S.-led international efforts to recoup 1MDB funds allegedly misappropriated have been hampered by Malaysia, which has been criticized for not investigating the fraud. Though Malaysia has pledged to not protect wrong-doers, doubts about its willingness to do so linger.

The Swiss prosecutor said four unnamed individuals and one undisclosed bank are being probed as part of its criminal investigation into 1MDB.

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