by Douglas Messier
You might call him the crook that fell to Earth.
Ten years ago, Mohamed Badawy Al-Husseiny was sitting next to Sir Richard Branson at the Oshkosh air show signing a deal on behalf of Abu Dhabi to invest $280 million in the British billionaire’s space tourism venture, Virgin Galactic.
The wealthy CEO of Abu Dhabi’s sovereign wealth fund, aabar investments, likely had dreams of gazing down on Earth while floating in space aboard Virgin’s SpaceShipTwo.
Today, Al-Husseiny is sitting in a jail cell serving a 10-year sentence for financial crimes. He also has been implicated in one of the largest financial frauds in history involving the theft of more than $4 billion.
Aabar ultimately invested $390 million into Virgin Galactic in exchange for a 37.6 percent ownership stake in the company. There has been no evidence of any wrong doing on the part of Branson or Virgin Galactic.
The Wall Street Journal reports that Al Husseiny was sentenced to jail in June by the Abu Dhabi Criminal Court. Khadem al Qubaisi, who once headed up aabar Investments’ parent company, International Petroleum Investment Co., received a 15-year sentence at the same time. The two men must collectively pay $336 million in restitution for their crimes.
The Journal reports:
The Abu Dhabi court statement didn’t mention specific details of the charges, other than to say Mr. Al Qubaisi, referred to as the “first defendant,” was convicted of “exploiting his job and unlawfully appropriating 149 million euros after selling shares he owns for the company he heads, without disclosing his ownership of the shares, for 210 million euros.”
Further details of that transaction weren’t provided, but people familiar with the conviction said it wasn’t related to the Malaysian fund scandal. The statement said the investigations were part of a broader investigation by the Abu Dhabi Public Funds Prosecution into allegations of corruption.
Mr. Al Husseiny, the “second defendant,” was convicted of “exploiting his position and facilitating the seizure of the company’s money by” Mr. Al Qubaisi, according to the statement and people familiar with the matter.
Both men have been linked to the looting of 1Malaysia Development Bhd. (1MDB), a sovereign wealth fund established by former Malaysian Prime Minister Najib Razak to attract foreign investment into that nation. Officials say as much as $4.5 billion were embezzled from the fund.
Investigators say an entity was established in the British Virgin Islands (BVI) with a very similar name to aabar Investments. 1MDB subsequently transferred $3.5 billion to this entity.
Abu Dhabi officials claim the BVI entity had no connection with the aabar Investments sovereign wealth fund and that they did not authorize establishing it.
The Journal reports that Al Qubaisi claims they are lying and knew all about it.
In an interview in January, Mr. Al Qubaisi told The Wall Street Journal from Al Wathba prison in Abu Dhabi that he was being unfairly blamed as the “scapegoat” for the U.A.E.’s role in the 1Malaysia Development Bhd. scandal, where the Justice Department says $4.5 billion was stolen and distributed among a group of alleged co-conspirators, including Messrs. Al Qubaisi and Al Husseiny.
“I did this deal but I did it on behalf of the government of Abu Dhabi,” he said, adding that he was being forced to turn over assets to Sheikh Mansour bin Zayed, former chairman of IPIC and senior member of the emirate’s royal family. Now “they are putting everything on my back,” he said at the time.
The central figure in the 1MBD scandal is a Malaysian citizen named Jho Low. The international fugitive is accused of convincing Razak to establish the fund and then looting it.
Low used the stolen money to produce The Wolf of Wall Street, a Martin Scorsese film starring Leonardo DiCaprio about Wall Street fraudster Jordan Belfort. Low threw expensive parties and lavished expensive gifts on DiCaprio, Australian model Miranda Kerr, and other celebrities.