Abu Dhabi, UAEThursday 27 June 2019

Lebanese salesman arrested over $2 billion fraud

Ex-Credit Suisse bankers arrested in London over ‘bogus’ maritime projects in Mozambique

A contract at the heart of the alleged fraud involved plans to create a state-owned tuna fishing company in Mozambique. REUTERS
A contract at the heart of the alleged fraud involved plans to create a state-owned tuna fishing company in Mozambique. REUTERS

A Lebanese executive for a regional shipbuilding company has been arrested in New York over a $2 billion fraud linked to state-funded maritime projects in Mozambique, US prosecutors said.

Jean Boustani, the lead salesman for Privinvest, was arrested on Wednesday at New York’s John F Kennedy airport.

He is accused of paying kickbacks to the former finance minister of Mozambique, Manuel Chang, and three former Credit Suisse Group bankers after winning secret contracts for fishing, dock and maritime protection projects for the African nation.

The deals – not disclosed to the International Monetary Fund which was supporting the southern African nation - led to the organisation cutting off support and plunging it into a debt crisis.

The bankers were arrested in London on Thursday based on US charges that they pushed through loans to Privinvest , which is registered in the UAE, for three maritime projects.

US prosecutors say the projects never got off the ground and were fronts for the defendants to distribute some $200 million in bribes and kickbacks to themselves and Mozambique government officials.

The bankers Andrew Pearse, 49; Surjan Singh, 44; and Detelina Subeva, 37, have been charged in a New York court with violating US bribery laws, securities fraud and money laundering.

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They were arrested by London police officers on Thursday and appeared in court before being bailed.

“The indictment alleges that the former employees 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,” Credit Suisse said in a statement.

Mr Chang was arrested last week in South Africa as part of the same case. The 63-year-old is accused of signing off guarantees to repay the loans as finance minister, but did not disclose them to other members of the government or international institutions.

Prosecutors said the defendants concealed the misuse of the funds and misled investors abroad including in the United States about Mozambique's creditworthiness. The companies missed more than $700 million in loan payments after defaulting in 2016 and 2017, the indictment said

Updated: January 4, 2019 04:32 PM

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