Second former Credit Suisse banker pleads guilty – AIM report

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Second former Credit Suisse banker pleads guilty – AIM report

9:26 CAT | 23 Jul 2019

Andrew Pearse, former managing director at Credit Suisse Group, leaves court earlier this year. [File photo: Bloomberg]

A second former director of the bank Credit Suisse, Andrew Pearse, has admitted to receiving millions of dollars in bribes in the scandal of Mozambique’s “hidden debts”.

United States prosecutors had charged three former Credit Suisse directors with offences such as money laundering and wire fraud arising from the loans of over two billion dollars that Credit Suisse and a second bank, VTB of Russia, had granted to three fraudulent, security-linked Mozambican companies, namely Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Managment).

Because US banks were used to channel bribes and kickbacks, and because some of the fraudulent debt was sold on to US investors, the US claims jurisdiction. A US indictment (based on a million pages of transcripts of phone calls, e-mails and financial documents) names three former Credit Suisse bankers (Pearse, Detelvina Subleva and Surjan Singh), Jean Boustani, a key salesman for the Abu Dhabi based Privinvest group, which became the sole contractor for the three fake companies, and former Mozambican finance minister Manuel Chang.

Boustani is under arrest in New York, where he has denied all charges. Chang is under police custody in Johannesburg, fighting against possible extradition to the US.

Now two of the three former Credit Suisse bankers have struck deals with the US prosecutors. The first to do so was Subleva who in May pleaded guilty to one count of conspiracy to launder money. As part of the plea bargain, three other conspiracy charges were dropped.

According to the Bloomberg agency, on Saturday, before a judge in New York, Pearse admitted to receiving millions of dollars in bribes, and pleaded guilty to one count of conspiracy to commit wire fraud.

Pearse reportedly told the New York court that Privinvest officials “wired me millions of dollars in unlawful kickbacks from loan proceeds and illegal payments for my assistance in securing loans by Credit Suisse”.

He was released on bail of 2.5 million dollars and allowed to return to his home in Britain, where he owns a property worth two million dollars. He will be electronically monitored and must report to agents of the Federal Bureau of Investigation once a week.

The extent of Pearse’s collaboration with the US authorities is not yet clear. His plea agreement and all other related records were placed under seal. His lawyer, Lisa Cahill, and Mark Bini, a federal prosecutor, both declined to comment after the court hearing.

Pearse is the most senior of the Credit Suisse figures charged, and the US prosecutors regard him as one of the ringleaders in the fraud. His links with Privinvest were so close that, after leaving Credit Suisse, he went to work as a director for the Privinvest-linked companies that operate under the name Palomar.

Pearse also figures in the audit of Proindicus, Ematum and MAM carried out in 2017 by the foremost forensic audit company Kroll. The audit report does not name names, but Pearse has been identified as the figure referred to as “Individual B” in the report.

Privinvest follows the tactic of denying everything. It claims that it did nothing wrong in the contracts with Proindicus, Ematum and MAM – although the Kroll report clearly shows that the equipment Privinvest sold to the three companies was grossly over-invoiced.

Source: AIM