Too Rich, Too Young, Too Fast: How The Billions of 1MDB Turned The Heads of Two Genevans

Translation of Le Temps article:

The debacle of the Malaysian sovereign fund 1MDB represents the financial scandal of the decade. At the heart of this case of plundering and corruption, is a group of Swiss residents, who enjoyed partying together before everything went wrong. It’s a story of a friendship shattered by too fast a fortune.

They were promised a bright future in finance. The Genevans Xavier Justo and the Saudi Tarek Obaid, who grew up in the city of Calvin, were like two fingers, trained in victory. Until a torrent of money falling from the sky smashed their friendship: sending one to a Thai prison and the other to the heart of the financial scandal of the decade. 1MDB.

This week, Singapore and the Swiss financial watchdog (FINMA) punished the Swiss based Falcon Private Bank for its involvement in the misappropriation of billions of dollars belonging to the Malaysian sovereign fund. Another Swiss bank, BSI bank was forcibly dissolved in May. The Finance Ministry of the Confederation (MPC) has frozen several millions of francs suspected to be involved in the 1MDB affair.

The American Department of Justice has filed a civil complaint against those allegedly  responsible for this misuse of public funds, initiating the freezing of more than a billion of doubtful assets worldwide. A record.

Among the key players in the case: PetroSaudi, a company established in Geneva, yet completely unheard of before this affair.

Ferrari and endurance sports

Long before they became directors, Xavier and Tarek met in the early 1990s. They worked together in the Scandinavian Bank of Geneva and for Piguet, before joining Fininfor, a small wealth management firm. The former co-directed this come. The second rented space there for his company PetroSaudi, set up in Geneva with the support of friends.

Rental contract
Rental contract

Xavier Justo at that time was also a part-owner of a couple of nightclubs Platinum and the Z Cube. He drove a Ferrari and enjoyed endurance sports. A self-taught man now 50 years old, this son of Spanish emigrants built his career without a university education.

Despite his many tattoos, Xavier was a role model  for Tarek, who was 10 years younger, less experienced but equally ambitious. The young Saudi had the advantage of connections: he became close to Prince Turki bin Abdullah Al Saud (45), seventh son of the late King Abdullah of Saudi Arabia. Likewise he was close to the Ojjeh family, the owners of the Genevan private jet company TAG Aviation, thanks to an earlier relationship with an heiress of this powerful family. In addition, Tarek claims today, according to his resume, to be a “private adviser to the Saudi Crown” and to hold “an important network of contacts within the Gulf Cooperation Council.”

Born into a wealthy family, the young Obaid arrived in Geneva in 1982. He attended the International School before obtaining a degree from the American University of Georgetown (Saudi campus). In a letter of recommendation for admission to the Faculty, the former US Ambassador Walter Cutler described him as a member of one of “the leading families of Saudi Arabia.” The grandfather of Tariq had held ministerial duties in the Kingdom before founding the first printed newspapers in the country, eventually becoming a well-known writer.

Tarek Obaid was also eager to come up in the world. He suffered from the bankruptcy of his father. “He had been a successful businessman, active in trade promotion between the Middle East and Switzerland, in particular via the Obteco company based in Geneva. But he ended his career leaving nothing for his family”, says an anonymous source close to the clan Obaid. Tarek’s father lost everything in the aftermath of the Gulf War.

So these two Genevois are not from the same background, but they shared the same desire for success and a taste for risk-taking. Then came the economic crisis of 2008. “My husband dropped everything because of the economic conditions, says Laura Justo, the wife of Xavier. He did not flee because he had problems with his employer, as has been claimed by PetroSaudi”.

The couple started a new life in Asia, exploring the continent in search of the ideal base. Almost two years passed. Until one day Xavier received an unexpected call. “It was Tarek”, Laura recalls. “My husband was offered a directorships for the new operating center of PetroSaudi in London”. This was the British branch of the Geneva-based company, whose official headquarters are in Riyadh, although we have not found any trace of it in the Register of the Saudi companies.

Today the company is suspected of having played a role in the disappearance of some $700 million, through a partnership formed in 2009 – the year of the opening of its offices in London – with 1MDB, the sovereign wealth fund controlled by the Malaysian Prime Minister Najib Razak.

The money concerned – a loan from 1MDB loan which was never repaid – was channelled into the account offshore of the company Good Star, claimed to belong to PetroSaudi, according to official statements signed by Tarek. But in reality, says the American official complaint, that amount ended up in the pockets of the Malaysian businessman Jho Low who, as Xavier Justo later wrote, is none other than the “money maker” of Najib Razak, and his wife Rosmah Mansor. For their part, PetroSaudi claimed to have paid back all they owned, including interest, to the Malaysian sovereign fund.


The federal prosecutor is in the process of examining these issues connected to the Good Star account and the alleged fake contract with 1MDB. In particular as to whether PetroSaudi was used as a front by Malaysian leaders to conduct their criminal designs.

Thus the “miracle contract” with 1MDB has since turned into a nightmare for PetroSaudi. But Xavier at the time was totally unaware of anything, according to his wife and lawyers of Tariq.

Yet the salary offered by the Saudi youth to his friend was over 600 000 per year, according to internal emails to the company. At least three times that if we take into account the bonus, which is now refuted now PetroSaudi – his official residence was also paid by the company. Whatever the case, Xavier Justo agreed to interrupt his pursuit of a tropical paradise in order to move into an upscale neighbourhood of London.

Xavier email
Xavier email

“The first six months were fantastic,” recalls Laura Justo. Her husband renewed his skills. His linguistic abilities, combined with the new credibility and financial clout of PetroSaudi enabled Xavier to win oil concessions in Venezuela. He made numerous trips between  Caracas and London as the contracts took shape.

But, there were also difficulties. “Tarek, originally a close friend, became unstable, angry and aggressive towards his colleagues. His fortune fell from the sky and it turned hiss head, “said Laura Justo. Having become suddenly very wealthy, the young Saudi started  to burn the candle at both ends. He and his CFO, Patrick Mahony a Briton the same age with a Genevan accent and a Swiss passport, “were notorious for their partying and tendency for excess,” say witnesses of their nocturnal debaucheries, including Geneva disco employees.

When in their cups, Tarek and Patrick would begin to boast that with 1MDB they had concluded with the “deal” of their lives. “They often told my husband they had filled their pockets several times” Laura notes. These boasts began to annoy Xavier. The break came the day he missed an important business flight to New York, provoking Tarek into a rage. “My husband didn’t go back to the office for weeks. He worked from home, now forced to pay for our apartment, whose rent exceeded 15 000 per month”, says Laura Justo. PetroSaudi reduced and eventually stopped paying her husband’s salary, who in the end ran out of money.

All this became too much for Xavier, who resigned about a year after his appointment. “Contrary to what PetroSaudi has always claimed, my husband was not dismissed,” she says, with email exchanges in her hand. The company has since modified its version, claiming that the separation was made on the basis of “mutual consent”, Xavier’s performance having not been satisfactory.

Laura Justo, who worked at Fininfor before 2009, had at that time performed administrative duties for PetroSaudi in Geneva. “Tarek’s company had no apparent activity. His bank accounts held little money, there was very little to do for him. The company was worthless until it joined up with 1MDB, “she says.

Really? “The Swiss branch of PetroSaudi never intervened in 1MDB transactions and had no real activity,” says Jean-François Ducrest, lawyer for the Obaid family. Emails show show that the company was planning to start a business in Geneva trading in raw materials, but could not achieve this because his Swiss tax status prohibited him from engaging in commercial activities.

“Xavier Justo had no senior executive position in London, but carried administrative support with few computer skills,” added the former Genevan barrister. According to the British Commercial Register and after several emails and internal documents were examined by us, it is clear that Xavier was in fact the director of PetroSaudi from June 28, 2010 to April 22, 2011, date of his departure from the City.

Email from Xavier to Tarek's lawyers
Email from Xavier to Tarek’s lawyers

The divorce between Tarek and Xavier was a painful one. Hate mail exchanges flew between them. Tarek regarded himself as “not the kind of person you can drop”.  Xavier perhaps knew too much “One word from you about this, and you and I are not finished [sic],” warned Tarek. His former comrade of fortune demanded $6.5 million before leaving. The heat rose on the discussions. Patrick Mahony and the PetroSaudi lawyers intervened and the pay off was reduced to 4 million. Furious, the Genevan left, not without having taken with him 90 gigabytes of sensitive information, in which was hidden the story about 1MDB.

Exchange of emails
Exchange of emails

“My husband felt threatened. He needed a “life insurance.” But he did not himself steal data” says Laura Justo. “It was a work colleague, who as much disgusted with Tarek and Patrick, who siphoned PetroSaudi servers before releasing their contents. ”

Xavier withdrew to the Thai island of Koh Samui. For months, he dissected the data stolen from his former employer. “He exclaimed: a 70% commission is totally immoral!” recalls the journalist Clare Rewcastle Brown, who inherited the data that Xavier had first tried to cash in first from PetroSaudi itself then the media.

Read also: Clare Rewcastle Brown, the number one public enemy of Malaysia

The case came to light early 2015. The following June, after a heavy handed arrest by Thai Special Forces, Xavier appeared in court and openly admitted having betrayed PetroSaudi, going so far as to accuse himself of all manner of evil in the media, including “Le Temps”. In return he received a sentence for 3 years in prison for attempted blackmail.

In Bangkok prison conditions are appalling. Xavier first had to share a cell with 70 other prisoners, later 30 prisoners. It was stained with sweat and urine. The conditions and the crowding prevented him from lying down to sleep. Until his wife paid the jailers for a few more square centimetres of comfort.

The break with Tarek is permanent. Xavier, who is to this date still imprisoned in Thailand (his request for transfer to Switzerland was refused): it is clear his old friends have definitely dropped him. Although it was they who had assured him, as evidenced by recorded conversations between Patrick and Laura Justo, an exit early from prison “by the back door”, in exchange for his confession.

Last July, Laura Justo, who sold all his assets in Thailand, took refuge in Geneva with her 2 year old son. “I was threatened. My husband was forced to plead guilty, his confessions had been dictated by Swiss and British agents engaged by PetroSaudi”, she says today. She has a dossier of 300 pages to support her allegations (including text messages, recordings, photos, etc.).

Amongst the evidence are handwritten letters from Xavier, who had been placed under enhanced surveillance and so had to bribe guards to organize an exchange of correspondence with his wife. From his cell in the Klong Prem prison, he recounts the manipulations he fell victim to and gives his interpretation of the 1MDB affair.

The PetroSaudi servers have been destroyed at the demand of the company’s officials. All that remains is Xavier’s own memory and the and copies of the stolen data, of which the last originals were given by his wife to a henchman of PetroSaudi – a fake police officer from Scotland Yard, according to Laura Justo – in front of the entrance to Geneva Airport.

In recent years, Patrick Mahony, the third member of the trio, has acquired a sumptuous chalet in the Lauenen Valley, at the heart of the Bernese Alps. The British-Swiss binational continues to make, according to several sources, regular visits in Geneva. Partly for family reasons, as well as for entertainment. In a telephone recording with Laura Justo, he explained the end of 2015 – that is after the opening of criminal proceedings in connection with 1MDB – saying he was in debt, his accounts having been frozen by the court. He also spoke about an interview between his lawyer and the MPC whom he alleged had confirmed had “nothing against him” and were just sitting on the matter until the wave of publicity had passed.

Tarek, meanwhile, in the aftermath of 2009 acquired a stake in Bellevue Education, a group of private schools in Switzerland. He also launched his foundation (EDOF) in memory of his late father and became one of the benefactors of the American Mayo Clinic. He has also approached Swiss political circles, whilst being prominent in the most elite of Genevan financial circles. He also took a stake in Renault F1, then invested in Silicon Valley (Robotex and Palantir), and created, via his brother in Geneva, a wealthy portfolio of Swiss real estate. This was all referred to by Xavier also in his exchange of letters with his wife.

Letters smuggled from Xavier to his wife
Letters smuggled from Xavier to his wife

Our research shows that Obaid holds at least 40 million francs worth of property on the shore of Lake Geneva.  We have been able to establish that these acquisitions were all made after 2009, the date of the wondrous contract with 1MDB. A close contact of the Obaid family described them as individuals of great human quality. “They just found a loophole in the system and have benefited. The temptation of easy money has clearly outweighed the potential risks”, the friend added.

The 1MDB case has since tainted the reputation of the Saudi royal family. In its complaint, the American Justice Department accuses the Prince Turki of having transferred more than 20 million, from the “contract of the century” with PetroSaudi into the accounts of the Malaysian Prime Minister Najib Razak. Some think that this aspect of the case could cost Tarek his powerful Middle Eastern supporters.

Transfer of money
Transfer of money

“There are no current legal proceeding directed against our customers” say PetroSaudi’s British lawyers. “Should this be the case in the future, they will be able to prove that they have done nothing wrong”.

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