MOZAMBIQUE’S former finance minister Manuel Chang was convicted of US charges that he was part of a US$2 billion bond fraud scandal that ensnared Credit Suisse Group AG and triggered a financial crisis for the African nation.
A federal jury in Brooklyn, New York, on Thursday (Aug 8) found Chang guilty of conspiracies to commit wire fraud and money laundering. Both counts carry prison terms of as long as 20 years in prison.
During the three-week trial, prosecutors said Chang “played an essential role” helping Mozambique fraudulently get billions of dollars in loans from Credit Suisse and Russia’s VTB Bank PJSC to fund three dubious maritime projects, including a tuna fishing fleet, shipyards and anti-piracy boats.
In exchange for guaranteeing the loans, Chang pocketed and laundered US$7 million in kickbacks from shipbuilder Privinvest Group paid by its employee Jean Boustani, according to prosecutor Hiral Mehta in the office of Brooklyn US Attorney Breon Peace.
‘A choice’
“The defendant at every step of the way made a choice,” Mehta told jurors in closing arguments Monday. “He chose to take millions of dollars in bribes because he cared more about money than his position.”
The jury deliberated about two days before delivering the verdict. They had asked to re-hear testimony from former Credit Suisse bankers Andrew Pearse and Surjan Singh, who both pleaded guilty to being part of the bribery and bond-fraud scheme.
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The outcome of Chang’s trial marks a vindication for US efforts to police foreign bribery and corruption after a federal jury in 2019 acquitted Boustani on all charges.
Chang’s lawyer, Adam Ford, said after the verdict he intends to appeal.
Ford argued at trial that his client hadn’t received any bribes and said evidence showed that any payments from Privinvest went to another man.
After the loans defaulted, Credit Suisse, VTB and investors lost hundreds of millions of dollars, according to the US. The so-called tuna bond scandal spawned bribery and corruption cases on three continents and also led to the imprisonment of the son of a former Mozambique president.
Credit Suisse in 2021 paid almost US$475 million to US and UK authorities while a London-based unit of VTB paid US$6 million in financial penalties to end a related probe into the Mozambique transactions by the US Securities and Exchange Commission.
Mozambique last month won a fraud case against Privinvest after a UK court ruled it must pay US$825 million for its role in the bond scandal. BLOOMBERG