US$7b 1MDB monies in the financial system - Swiss AG

The 1MDB fund was set up in 2009 soon after Najib became prime minister

The 1MDB fund was set up in 2009 soon after Najib became prime minister

Lauber said his visit to Malaysia was to discuss the coordination of the investigation into 1MDB, and how the differences between the legal systems of the two countries could impact criminal proceedings.

Apandi said he had, in fact, met Michael Lauber twice in Switzerland, over the issue.

"These are the types of discussions we're having at the moment", he said.

Lauber said he was confident that the coordination could be set up, but "it was not yet there".

"We think it was a pretext, it was kind of a Ponzi scheme".

"And only then as the second step, we are able by legal obligations to have the monies restituted", he said.

He said looking at the complexity of this high profile case and taking into account specific problems faced by the prosecution authorities, the case could go on for years.

However, the Swiss AG was unable to provide details on the assets seized by the Swiss government. "In [Swiss] legislation, we organise and manage the investigation".

Last month, lawyer Tommy Thomas was named as the new AG, replacing Apandi.

"I can't say all were misappropriated, some were used (in a) Ponzi scheme. fraud - away from 1MDB's original objective, which is for (the) development of Malaysia - to bribe officials, to pay interests to keep the Ponzi scheme running".

MALAYSIA'S 1Malaysia Development Bhd (1MDB) economic development fund was used as a Ponzi scheme by a clutch of conspirators to pay bribes and enrich themselves, Switzerland's top prosecutor said days after former Malaysian prime minister Najib Razak was charged with corruption for his role in the affair.

According to Lauber, six people are now under probe and two Swiss banks are suspected of involvement.

"We do what is mainly important to maintain the integrity of the Swiss financial system, and we [go] against people doing wrong things [against] Swiss nationals or with direct link to the Swiss system", Lauber said.

Earlier in May, Swiss prosecutors revealed that they had opened criminal proceedings into two former officials of PetroSaudi.

He added that the Swiss AG's office is also not seeking to do so presently.

"I recall that in my written reply to Switzerland, as the AG then, that since the Malaysian investigation was still ongoing, to accede to the Swiss request could prejudice the criminal matter in Malaysia", the daily quoted him saying. "If necessary and if further developments in our investigation show that it is necessary to also cooperate with actual 1MDB officials, that is a different story", he said.

Switzerland has been investigating how billions of dollars earmarked for economic development through 1MDB was diverted and made its way into Swiss banks. "Even in the worst situation, you need to uphold the rule of law".

"All or part of the financing obtained is alleged to have been used for other purposes, most particularly for the personal enrichment of the persons involved", the statement said.

"It was used for bribery of foreign officials, it was used for paying interest, it was used for motivating new officials to run against the legal requirements or it was just simply to reward them", Lauber said in an interview without identifying any of the people he was referring to in his comments.

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