BELLINZONA, Switzerland, Aug 28 (Reuters) - The Swiss

Federal Criminal Court on Wednesday convicted two executives at

an oil exploration company accused of embezzling over $1.8

billion from Malaysia's state investment fund 1MDB.

The verdict was the latest episode in the 1MDB scandal, a

complex tale of international corruption that has buffeted a

slew of financial institutions and individuals across the globe

since allegations of wrongdoing first surfaced in 2015.

Prosecutors alleged that Swiss-British national Patrick

Mahony and Swiss-Saudi Tarek Obaid, helped to set up a joint

venture with 1MDB by creating the impression that their company,

PetroSaudi, was backed by the Saudi government.

This was not, in fact, the case, but the accused managed to

persuade 1MDB's board into signing up to the scheme in 2009

before going on to defraud the fund, prosecutors said.

According to the indictment, the two executives defrauded

the wealth fund of $1.8 billion to enrich themselves, with Obaid

getting at least $805 million and Mahony at least $37 million.

Obaid was sentenced to seven years in prison by the

court, while Mahony received a sentence of six years.

Prosecutors said the two men created the fraudulent

scheme with fugitive Malaysian financier Jho Low, an advisor to

former Malaysian Prime Minister Najib Razak, who is already in

prison over his role in the multi-billion dollar scandal.

Initially extracting $1 billion from 1MDB so it could

buy a stake in their venture, the accused took a further $830

million from the fund between 2010 and 2011 as part of an

Islamic loan that followed on from their tie-up, prosecutors

said.

Malaysian and U.S. investigators estimate a total of

$4.5 billion was siphoned away from 1MDB following its inception

in 2009, implicating figures ranging from Razak, Goldman Sachs ( GS )

staff and high-level officials elsewhere.