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New York court rejects request to dismiss charges against Manuel Chang
7:54 CAT | 14 Jun 2024
FILE - Mozambique’s former finance minister pleaded not guilty in a U.S. federal court in New York , on Thursday, July 13, 2023. [File image: Elizabeth Williams via AP]
A U.S. federal court in New York has refused a request to annul the charges against former Mozambican finance minister Manuel Chang, detained as part of the judicial process opened by the North American justice system in the context of the ‘hidden debts’ case, reads a note from the Forum of Budget Monitoring (FMO), a Mozambican civil society coalition.
“Chang’s pre-trial motion was rejected in its entirety by Judge Nicolas of the Brooklyn Court, leaving all charges against the former Minister of Finance unchanged,” says the FMO text, to which SAVANA had access.
After an evaluation of the arguments presented, Nicholas G. Garaufis came to the conclusion that Chang’s request to dismiss the charges is unfounded, the document continues.
Manuel Chang is charged with three crimes: conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.
Chang submitted to the court a motion to dismiss the charges, compel production of certain materials, and strike certain phrases from the indictment, the FMO notes.
“The arguments presented range from technical issues, such as questioning whether his actions could be classified as fraud under American legislation, to the applicability of laws to combat electronic fraud and money laundering, considering that he has never set foot on American soil,” the FMO text reads.
Chang argues that, as a foreign employee, he was not subject to the jurisdiction of U.S. laws.
Underlying the foundations of the rebuttal presented by the former minister are the US prosecution allegations that Manuel Chang and his co-conspirators allegedly defrauded investors, fraudulently obtaining and defaulting on more than US$2 billion in loans, harming investors globally.
To facilitate the scheme, three Mozambican state companies were created: Proindicus, EMATUM and MAM, which then hired the Privinvest Group, based in Abu Dhabi, to carry out a maritime project in Mozambique.
Between 2013 and 2016, Proindicus, EMATUM and MAM took out US$2 billion in loans using irregularly issued Mozambican state guarantees, says the indictment.
The loans were arranged by two investment banks and sold to global investors, including in the US.
According to the indictment, in the course of these transactions, Chang and his co-conspirators defrauded investors with false statements and omissions regarding the use of loan proceeds, the payment of bribes to Mozambican officials and bankers, the amount and maturity of Mozambique’s debt, including the existence of the Proindicus and MAM loans, and Mozambique’s ability and intention to pay investors.
“Although the contracts specified that the loans should exclusively finance maritime projects, Chang and his co-conspirators diverted part of the revenues for personal enrichment and bribes,” the US court alleges.
Privinvest is also alleged to have charged inflated prices for the equipment.
The indictment says that Manuel Chang, as Mozambique’s finance minister from February 2005 to January 2015, played a crucial role in the scheme by signing the loan guarantees on behalf of the Government of Mozambique, committing the country to repay the loans in case of non-compliance by companies.
“In return, Chang received at least US$5 million in bribes from Privinvest. In 2015, the three entities and Mozambique faced debt service problems. To hide the companies’ near-bankruptcy from the public and the International Monetary Fund (IMF), the co-conspirators proposed exchanging EMATUM Loan Participation Notes for Eurobonds, presenting documents with false information about the loans and Mozambique’s creditworthiness,” the indictment also notes.
After the exchange, between May 2016 and March 2017, Proindicus, EMATUM and MAM defaulted, failing to pay more than US$700 million, the text reads.
Source: Savana
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