Saudi Arabia’s Ousted Spymaster Is Accused of Embezzling Billions

A state-owned conglomerate of Saudi Arabia has sued the country’s former spymaster in a Canadian court, alleging he embezzled billions of dollars, in a case that throws a spotlight on a bitter royal feud.

Tahakom Investments Co., a subsidiary of Saudi Arabia’s sovereign-wealth fund, filed the civil suit in Ontario Superior Court against

Saad al Jabri,

who fled the kingdom and is now living in Canada. Mr. Jabri is the former top aide of

Prince Mohammed bin Nayef,

known as MBN, who was removed as crown prince in 2017 by King Salman in favor of his son,

Mohammed bin Salman,

or MBS. Saudi authorities detained MBN last year and accused him of plotting a coup.

MBN was once one of the most influential members of the Saudi ruling family and a trusted U.S. ally known for his role in helping combat al Qaeda. His dismissal capped the rapid rise to power by his younger cousin, MBS.

Saad al Jabri attended an Oval Office meeting with President Barack Obama in 2015.



Photo:

OLIVIER DOULIERY/PRESS POOL/EPA/SHUTTERSTOCK

Mr. Jabri, for years at MBN’s side in the Interior Ministry, which MBN helped run, is credited by former U.S. officials with helping stop terrorist attacks on Western targets. He was fired several months before his boss lost his job, which prompted his flight to Canada.

The lawsuit against Mr. Jabri highlights the clash at the top echelons of the Saudi monarchy and brings unprecedented scrutiny in a Western court to the opaque business dealings of the royal family.

The lawsuit alleges that MBN colluded with Mr. Jabri to receive at least $1.2 billion in misappropriated funds. MBN allegedly transferred at least $55 million to Mr. Jabri as kickbacks, according to the suit. MBN, who remains in custody in Saudi Arabia, isn’t named as a defendant in the lawsuit that was filed in the Canadian court.

A campaign advocating for the Jabris said the family would “fight the recycled corruption allegations vigorously and are confident they will succeed in dismissing them.” It said in a statement issued in response to the case: “The family welcomes the opportunity to face off against MBS in neutral judicial forums.”

MBN hasn’t been reachable for comment since his detention in Riyadh last year.

Supporters of Mr. Jabri say the system that enriched him was business as usual in Saudi Arabia and had the blessings of MBN, who was then interior minister, and the late King Abdullah. Mr. Jabri’s family has argued that the Saudi government is pursuing him because he knows the secrets of the royal family, including details about MBS’s personal life, how he has received and spent money since joining the line of succession, and what he has done to achieve power.

Saudi King Salman, front left, with Mohammed bin Nayef, center, and then-Deputy Crown Prince Mohammed bin Salman, at an arrival ceremony for Jared Kushner and Ivanka Trump in Riyadh in 2017.



Photo:

bandar al-jaloud/Agence France-Presse/Getty Images

The Ontario Superior Court on Friday ordered a world-wide asset freeze against Mr. Jabri and directed him to disclose his assets publicly or face possible jail time, according to court documents seen by The Wall Street Journal.

The court also ordered banks, law firms and accountants in Canada, Switzerland, Turkey, the United Arab Emirates, the U.K. and the U.S. to disclose any records related to Mr. Jabri’s assets and requested those jurisdictions’ aid for enforcement of the disclosure order.

The lawsuit describes allegedly ill-gotten gains, some registered to other members of Mr. Jabri’s family, including 26 estates in Saudi Arabia valued together at more than $43 million, luxury condominiums at Boston’s Mandarin Oriental and Four Seasons hotels, and several properties in Canada.

At the heart of the current legal battle are Tahakom’s claims that it was defrauded under Mr. Jabri’s authority. It alleges that a group of men led by Mr. Jabri misspent $11 billion in state funds while working for the Interior Ministry. It accuses Mr. Jabri of funneling money from companies funded by the Interior Ministry for counterterrorism activities—and now owned by Tahakom—to himself, his family and associates.

The companies supported Saudi security initiatives by buying policing equipment and secure phones, paying informants and foreign leaders, and flying Saudi operatives around the world on private jets.

The lawsuit also accuses Mr. Jabri of putting his family and friends in charge of companies to ensure control while maintaining the appearance of separation. “While Al Jabri’s hands were hidden, his fingerprints are everywhere,” the lawsuit says.

In one instance, the lawsuit says, Mr. Jabri transferred two properties in Geneva and Vienna, valued together at nearly $400 million, from a Tahakom subsidiary to an entity that he ultimately controlled. “This was simply an outright theft carried out through a complicated series of fraudulent transactions orchestrated to enrich Al Jabri, his family and his Co-Conspirators,” the lawsuit alleges.

In 2008, another subsidiary called Sakab Saudi Holding Co., which according to its website provides operations and maintenance support to large-scale projects including in the military sector, improperly directed 38% of its profits to MBN and 5% to Mr. Jabri, the lawsuit claims.

Mr. Jabri’s supporters say he became wealthy in service to his country, partly through bonuses granted by the kingdom’s previous leaders, and is now being targeted by a political rival of his former patron, MBN. The Saudi state-backed conglomerate Tahakom argues Mr. Jabri is part of systematic corruption that a new government under MBS wants to eliminate.

“Al Jabri masterminded and oversaw a conspiracy,” the Canadian lawsuit says.

A Saudi official dismissed claims by Mr. Jabri’s supporters that the lawsuit is a political tool aimed at undermining the ally of MBS’s political rival, MBN. Asked about the crown prince’s role in pursuing the case, the official called the suit “a private dispute filed by corporate entities to recover funds that have been misappropriated from those entities.”

The court-ordered asset freeze on Mr. Jabri represents a successful step on the part of the Saudi government to pursue corruption allegations in a Western court. But the lawsuit also targets a longtime U.S. counterterrorism partner in the turbulent Middle East who could reveal sensitive secrets about their joint operations.

MBS has made combating corruption a centerpiece of his agenda. In 2017, he locked up hundreds of the country’s business and political elite in Riyadh’s Ritz-Carlton Hotel, accusing them of corruption and releasing them only in exchange for out-of-court settlements he said netted the state billions of dollars.

He has continued to press corruption allegations, quietly detaining hundreds of lower-level officials and businessmen in recent years. International human-rights groups and some domestic critics describe the arrests as an effort by MBS to consolidate power and sideline potential opponents.

Mr. Jabri’s supporters portray him as a faithful public servant who is being unfairly persecuted. An adult daughter and son were barred from leaving Saudi Arabia in 2017 and were arrested in March 2020 and convicted recently on charges of money laundering and attempting to escape the country, according to a Saudi official familiar with the proceedings.

Another son of Mr. Jabri has said they are being held as hostages to get their father to return. The Jabri family campaigners called the Canadian lawsuit “an obvious attempt to distract the world from the brutality of MBS’s well documented crimes of taking Sarah and Omar hostage in 2017, his enforced disappearance of them in March 2020, their unjust jailing by MBS, and MBS’s complicity in the torture of Dr. Aljabri’s relatives and friends.”

In August, Mr. Jabri sued MBS in a U.S. court, claiming that he had dispatched a hit squad to Canada to assassinate him in 2018, less than two weeks after Saudi operatives killed and dismembered Saudi dissident journalist

Jamal Khashoggi

in the kingdom’s Istanbul consulate. The State Department is now considering whether MBS should have sovereign immunity in that case. The Saudi government hasn’t publicly responded to those allegations.

Write to Stephen Kalin at stephen.kalin@wsj.com and Bradley Hope at bradley.hope@wsj.com

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[Source : The Wall Street Journal]

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