U.S. prosecutors charged three former Credit Suisse AG bankers and Mozambique's former Finance Minister Manuel Chang with alleged fraud and money laundering connected to Mozambique's $2 billion hidden loans scandal, the Financial Times reported Jan. 4.
Mozambique borrowed the money from international investors in 2013, when Chang was finance minister, to finance maritime projects. The country defaulted on the debt repayments and auditors later found that $500 million was missing. The loans were also partly hidden from donors and the International Monetary Fund, which cut financial support to Mozambique after discovering them.
Chang was arrested in South Africa and intends to fight extradition to the U.S. The three bankers — Andrew Pearse, Surjan Singh and Detelina Subeva — were arrested on a provisional arrest warrant in England and released on bail, the FT said.
According to the indictment, Chang and the bankers "created the maritime projects as fronts to enrich themselves and intentionally diverted portions of the loan proceeds" for bribes and kickbacks of roughly $200 million, the FT said.
The U.S. attorney's office also alleged that the bankers acted with intent, in part, to benefit Credit Suisse. However, a spokesperson for the Swiss lender said it has not been charged and that the bankers "worked to defeat the bank's internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank," according to the report.
Additionally, prosecutors also charged Jean Boustani — an executive at Abu Dhabi-based Privinvest, which supplied boats and equipment for the projects and the company Pearse and Subeva left Credit Suisse for in 2013 — with three counts of conspiracy, the FT said.
Boustani was arrested in New York on Jan. 3, according to the FT.
"Credit Suisse will continue to cooperate with relevant regulators following these indictments, and separately looks forward to continuing to work with the relevant authorities to move forward with the proposed debt restructuring," a bank spokesperson told the newspaper.