January 18, (THEWILL) – A former Finance Minister of Mozambique, Manuel Chang, has been sentenced to 102 months in prison for his role in a $2 billion international fraud, bribery, and money laundering scheme, in which he received $7 million in bribes to approve fraudulent loans.
Chang was sentenced on Friday, after a four-week trial that ended in August, in which Judge Nicholas G. Garaufis of the U.S. District Court in Brooklyn determined that the 69-year-old former minister, had conspired to commit wire fraud and money laundering through an international scheme that bilked a number of international investors out of about $2 billion.
According to court documents and evidence presented at trial, Chang received $7 million in bribes in exchange for signing guarantees on behalf of the Republic of Mozambique to secure funding for three loans for maritime projects. As part of the scheme, Chang and his co-conspirators falsely told banks and investors that the loan proceeds would be used for the projects and not to pay bribes to government officials. In fact, Chang and his co-conspirators diverted more than $200 million of the loan proceeds that were used, among other things, to pay bribes and kickbacks.
Between 2013 and 2015, in his capacity as Mozambique’s Minister of Finance, Chang, together with his co-conspirators — including executives of Privinvest Group, a United Arab Emirates-based shipbuilding company — ensured that Credit Suisse AG, through its subsidiary in the United Kingdom, Credit Suisse Securities (Europe) Limited (CSSEL), and another foreign investment bank would arrange for more than $2 billion to be extended to companies owned and controlled by the Mozambican government: Proindicus S.A. (Proindicus), Empresa Moçambicana de Atum, S.A. (EMATUM), and Mozambique Asset Management (MAM). The proceeds of the loans were intended to fund three maritime projects for which Privinvest was to provide the equipment and services. Specifically, Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing, and MAM was to build and maintain shipyards.
Instead, Chang and his co-conspirators illegally facilitated Privinvest’s diversion of more than $200 million of the loan proceeds to bribes and kickbacks. These funds included more than $150 million that Privinvest used to bribe Chang and other Mozambican government officials to ensure that companies owned and controlled by the Mozambican government would enter into the loan arrangements, and that the government of Mozambique would guarantee those loans. The loans were subsequently sold in whole or in part to investors worldwide, including in the United States. In doing so, the participants in the scheme conspired to defraud these investors by misrepresenting how the loan proceeds would be used. Ultimately, Proindicus, EMATUM, and MAM each defaulted on their loans and proceeded to miss more than $700 million in loan payments, causing substantial losses to investors.
On August 8, 2024, Chang was convicted of one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. In addition to the term of imprisonment, Chang was ordered to forfeit $7 million. A restitution amount will be determined at a later date.
In October 2021, Credit Suisse AG and CSSEL (together, Credit Suisse) admitted to defrauding U.S. and international investors in the financing of an $850 million loan for the EMATUM project. CSSEL pleaded guilty to conspiracy to commit wire fraud and Credit Suisse AG entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and Money Laundering and Asset Recovery Section (MLARS) and the U.S. Attorney’s Office for the Eastern District of New York. As a part of the resolution, Credit Suisse paid approximately $475 million in penalties, fines, and disgorgement as part of coordinated resolutions with criminal and civil authorities in the United States and the United Kingdom.
“Manuel Chang abused his position as Finance Minister of Mozambique by obtaining $7 million in bribe payments in exchange for helping secure more than $2 billion in loans. Chang’s brazen misconduct betrayed his duty to the people of Mozambique and defrauded investors, including those in the United States, of substantial amounts. With today’s sentence, Chang has been held accountable for his violations of U.S. law”, said Principal Deputy Assistant Attorney General Brent S. Wible, head of the Justice Department’s Criminal Division.
“Today’s sentence shows that foreign officials who abuse their power to commit crimes targeting the U.S. financial system will meet U.S. justice. My office will continue to pursue those who violate our laws and harm U.S. investors regardless of their power, position or title”, Acting U.S. Attorney Carolyn Pokorny for the Eastern District of New York, said.
The Assistant Director in Charge, James E. Dennehy of the FBI New York Field Office said, “Manuel Chang abused his authority as the former Mozambique Finance Minister by helping to obtain billions of dollars in loans, a large portion of which was diverted from its intended purposes to satisfy bribe payments, ultimately causing significant financial loss to U.S. and global investors. With the support of his co-conspirators, Chang violated the trust of his office and wielded his position to enrich himself and other Mozambican officials. May today’s sentencing reiterate the FBI’s commitment to dismantling all corruptive malpractices orchestrated by foreign governments, especially those targeting our country as their personal piggy-bank.”
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