Hidden debts : Jean Boustani denies everything – Savana

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Hidden debts : Jean Boustani denies everything – Savana

4:41 CAT | 05 Jul 2019

in file CoM

In a 42-page defence document lodged with the New York court in the United States of America to which Savana had access, Jean Boustani’s lawyers say that their client should be acquitted of all crimes with which he is charged by the US court.

Lawyers at Willtkie Farr & Gallagher LPP office say the court should reject the charge of conspiracy for securities fraud, because the charge, even if proven, does not constitute a punishable offence in the United States of America in the terms in which it is formulated.

The defence team claims that there are two grounds for requesting the rejection of the charge, namely that the charge does not specify what type of securities are involved, and that it cannot assert that domestic securities fall within the court’s jurisdiction.

The defence quotes a Judge Raggi as pointing out that the US government’s indictment “includes pages and pages about what happened in Mozambique, but does not tell us what securities fraud is”.

The charges against Boustani allege he defrauded American investors who bought debt contracted by the three Mozambican companies, but the defence points out that the sale of the said securities was made by the bank Credit Suisse, transactions with which Boustani had nothing to do.

At one hearing in New York, the prosecution presented 10,000 pages of evidence collected since 2011.

According to the defence, the prosecution alleges, in general, that Jean Boustani and the other suspects in the case conspired to defraud investors and potential investors in Ematum, but maintains that the allegation is insufficient because the Ematum is an entity and its debt does not constitute securities.

On the other hand, even if the investments in Ematum could be called fraudulent securities, the prosecution does not refer to domestic securities transactions.

For a charge of conspiracy to commit securities fraud to be brought, it must be alleged that the defendant had obtained securities listed on a US stock exchange or purchased or sold in the United States.

In addition, the claim that one US buyer purchased securities is not sufficient to make it a domestic transaction.

The defence also says that the charge of electronic fraud should be rejected, because prosecutors are unable to prove that any criminal wrongdoing had occurred within US criminal jurisdiction.

“Neither the electronic fraud nor the conspiracy for electronic fraud [charges] apply extraterritorially,” defence documents read.

For acts to be punishable, it must be demonstrated that they took place on North American soil, which, according to the defence, they did not.

“Did not launder money in the USA”

The defence also calls for the charge of money laundering conspiracy to be dismissed on the grounds that it is based on extraterritorial conduct that does not fall within the purview of US criminal jurisdiction over money laundering.

Jean Boustani’s lawyers cite a US Congress position that “explicitly delineated extraterritorial reach by providing that no non-US citizen may be charged with that conduct unless part of it has occurred on US territory”.

US law, the defence continues, defines what non-US citizen money laundering means: “initiating, concluding or participating in the commencement or conclusion of a transaction.”

In this sense, in order for the prosecution to have its claim satisfied, it must demonstrate that Mr. Boustani “participated in the beginning of a transaction (for example, by sending money), or concluded the transaction (receiving money) in the US”.

However, the defence understands, the indictment does not prove that Jean Boustani or any of his alleged co-conspirators ever commenced a transaction via a US bank account.

The only transactions alleged to have occurred in the US are those between various banks in Manhattan.

In the executive summary of the audit report, Kroll states that Privinvest inflated the cost of services and goods it provided to Mozambique by at least US$ 713 million.

“The difference in the goods and services contained in the invoices issued by the supplier to ProIndicus and Ematum, assessed by independent experts, is close to a total of US$ 713 million,” the Kroll report points out.

Other arrests

In addition to Boustani, who is incarcerated in the United States, others involved in the ‘hidden debts’ case in New York include Andrew Pearse and Surjan Singh, who were briefly detained and await a decision on an extradition request in the United Kingdom, and former Mozambican finance minister Manuel Chang, who is awaiting possible extradition in Kempton Park jail in Johannesburg.

Meanwhile, ex-Credit Suisse banker Detelina Subeva has pleaded guilty to money-laundering conspiracy.

“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 Judge William Kuntz II during a court session in Brooklyn, New York.

The illegal payments, made in 2013, were linked to a loan from Credit Suisse to a Mozambican state-owned company, the former vice president of Credit Suisse’s global finance unit said.

Subeva, a Bulgarian citizen, said that in 2013 her boss, Andrew Pearse, told her he had received a US$1 million kickback in connection with a US$372 million loan to a Mozambican state-owned company. She said the kickback came from Privinvest, an Abu Dhabi-based company that contracted with Mozambican state-owned companies.

Subeva said Pearse transferred about US$200,000 of the kickback to her bank account. “I agreed to accept and keep these monies knowing that they were the proceeds of illegal activity,” Subeva said.

Source: Savana