He was shown saying this during a speech last Friday, according to a video clip uploaded by blogger Din Turtle, who has carried a number of Mahathir's interviews critical of Prime Minister Najib Razak.
He said Najib may be able to evade investigation into the scandals surrounding 1MDB that are being investigated overseas, but not abroad.
"Laws abroad are now different from before. If a crime takes place here, the laws here apply.
"But if (the crime) involves other countries, the other countries have the power (to take action)," he said.
"Right now, in Switzerland, UK, US ...(there is already a money laundering probe). They have a right to issue a summons for the Interpol to arrest him (if cause is established).
"If he leaves the country, he may be arrested," said the long-serving former PM in his speech at the 'Kumpulan Melayu Berani Bersatu' in Kuala Lumpur, according to the video clip.
However Mahathir cautioned he was merely speculating.
"It is a possibility, I am guessing, not that it would happen," he said.
Mahathir cited how Sudanese president Omar al-Bashir could be arrested abroad in any country that recognises his crime.
Omar is wanted by the International Criminal Court for war crimes, and has an international travel ban.
Mahathir said if found guilty, Najib would similarly be prohibited from leaving the country, even if he "pulls out money from his passport".
The Wall Street Journal (WSJ) this morning reported the US Federal Bureau of Investigation (FBI) having initiated a probe into allegations of money laundering related to the debt ridden 1MDB.
This is despite the detention of Umno former leader Khairuddin Abu Hassan this week having stopped him from travelling to the US to meet with the FBI.
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