Mozambique's former finance minister is scheduled to appear in a US court on Thursday to face accusations in a $2 billion loan scheme involving three state-owned enterprises.
Manuel Chang landed in New York late Wednesday after being extradited from South Africa, where he was detained in December 2018 on US allegations of wire fraud, securities fraud, and money laundering, according to a report by the American news agency, Reuters.
At 3:30 p.m. EDT (1930 GMT), he will be formally charged before U.S. District Judge Nicholas Garaufis in Brooklyn. He should be held in custody until trial, according to the prosecution, who cited his suspected important involvement in the scam and the prospect of a severe penalty if found guilty in a court file on Thursday.
Federal prosecutors in Brooklyn said, "If released on bail, the defendant only has to walk into the permanent mission of Mozambique in Manhattan to potentially avoid prosecution." Chang's attorneys want to ask for his release on a $1 million bail with a $100,000 cash guarantee.
The so-called "tuna bonds" lawsuit arose from financing provided to the three state-owned businesses by Credit Suisse and the Russian bank VTB between 2013 and 2016 for initiatives to advance Mozambique's fishing sector and enhance marine security.
At least $200 million, according to the prosecution, was routed to several defendants and Mozambican government officials.
According to federal prosecutors, Chang surreptitiously had the government of Mozambique guarantee the loans in exchange for bribes, and the three firms were only "fronts" for Chang and other defendants to profit themselves. Prosecutors claim that the scam deceived US investors about Mozambique's creditworthiness. Chang has maintained his innocence.
Jean Boustani, a salesperson for a Lebanese shipbuilding business, was among the other defendants accused of paying officials and bankers to gain contracts from state-owned enterprises. In December 2019, he was acquitted at trial after testifying that he had no part in structuring the loans for investors.
In 2019, three former Credit Suisse bankers pled guilty. Credit Suisse, which was rescued this year by erstwhile competitor UBS (UBSG.S), agreed to pay $475 million to the United Kingdom and the United States in 2021 to settle bribery and fraud allegations.
Although Boustani's business Privinvest did transport ships and equipment to Mozambique, prosecutors said their worth was substantially exaggerated. The loans eventually defaulted, and investors lost money. Credit Suisse has erased Mozambique's debt of $200 million.
Mozambique revealed previously unknown state-backed borrowing in 2016, resulting in a currency crash and sovereign debt default after the International Monetary Fund and international donors withdrew assistance. In London, the nation is suing Credit Suisse and Privinvest for compensation and restitution.