Ex-Credit Suisse banker pleads guilty in Mozambique fraud – AIM report

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Ex-Credit Suisse banker pleads guilty in Mozambique fraud – AIM report

9:34 CAT | 21 May 2019

File photo: RFI

In a major breakthrough for US prosecutors, Detelvina Subeva, a former senior official in the bank Credit Suisse, has pleaded guilty before a New York judge to conspiracy to commit money laundering, in connection with the largest financial scandal in Mozambican history.

This was the fraud whereby three security-related companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management), obtained loans of over two billion dollars from Credit Suisse and the Russian bank VTB. The loans were only possible because the previous Mozambican government, under President Armando Guebuza, issued loan guarantees.

The guarantees meant that, in the likely event of the companies not being able to repay, the Mozambican state would become liable for the entire two billion dollars.

The US Federal Bureau of Investigation (FBI) investigated the fraud, and found that it had nothing to do with the declared intentions of boosting Mozambican coastal protection and creating a tuna fishing fleet. Instead, it was an elaborate scheme whereby hundreds of millions of dollars were channelled into private pockets.

The US prosecutors estimated that at least 200 million dollars went on bribes and kickbacks. Involved in this corrupt scheme were senior Mozambican officials (notably former Finance Minister Manuel Chang, who signed most of the loan guarantees), directors from Credit Suisse, and officials from Privinvest, the Abu Dhabi-based company which became the sole contractor for the three fraudulent companies.

Under a warrant issued by the US authorities, three former Credit Suisse directors, Andrew Pearse, Surjan Singh and Detelvina Subeva were arrested in London in early January. The three had been fighting extradition to the US – but Subeva changed her mind, and went voluntarily to New York last week.

According to a report carried by the Bloomberg agency, on Monday Subeva told U.S. District Judge William Kuntz II in Brooklyn, that she helped launder the proceeds of some of the loan money paid by Privinvest.

“I agreed with others to help launder the proceeds of criminal activities, namely illegal kickbacks paid by a company named Privinvest and its representative, Jean Boustani,” Subeva told the judge. The illicit payments, which Subeva said were made in 2013, were tied to the loan from Credit Suisse for 372 million dollars to Proindicus.

Subeva said Pearse, who was her superior, told her he had transferred 200,000 dollars into an account she had recently opened in the United Arab Emirates from the approximately one million dollars in kickbacks paid by Boustani and that Privinvest had paid him.

“I agreed to accept and keep these monies knowing that they were proceeds of illegal activity,” she said.

Subeva appears to have struck a deal with the prosecutors, under which other charges (such as conspiracy to commit wire fraud and securities fraud) have been dropped. The amount of bribe and kickback money she admitted is nowhere near the 200 million dollars mentioned in the US indictment.

Judge Kuntz said the plea agreement Subeva has with the US is sealed. He has allowed her to travel between New York and London against bail of two million dollars. No date for sentencing has been set.

The only other person indicted under the US warrant who is in New York is Boustani. Since he is regarded as a flight risk, he has not been granted bail.

Chang is in police custody in South Africa. He was detained on 29 December, and has been fighting against extradition to the US.

The Mozambican Attorney-General’s Office has requested his extradition to face charges in Mozambique. A Johannesburg court found that both the US and the Mozambican requests met the requirements for extradition laid down n South African law. It is now up to the South African Justice Minister to decide which country Chang shall be extradited to.

Source: AIM