Home Business Three bankers nabbed over $2b fraud

Three bankers nabbed over $2b fraud

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For their alleged involvement in $2 billion fraud, three former Credit Suisse bankers have been arrested.

They are accused of taking part in a $2 billion fraud scheme involving companies in Mozambique, United States authorities said.

The scheme allegedly involved loans to state-owned companies in Mozambique.

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The former employees of the Swiss investment bank were arrested in London on Thursday.

The men have been released on bail in London while the US seeks their extradition.

The men – Andrew Pearse, 49; Surjan Singh, 44; and Detelina Subeva, 37 – were charged in an indictment issued by a US District Court in New York with conspiring to violate US anti-bribery law and to commit money laundering and securities fraud.

The arrests came five days after former Mozambique Finance Minister Manuel Chang was arrested in South Africa as part of the same criminal case.

A fifth man, Jean Boustani, was arrested on Wednesday at New York’s John F. Kennedy Airport. Mr Boustani is a Lebanese citizen who worked for an Abu Dhabi-based contractor of the Mozambican companies, according to the indictment.

The indictment says that through a series of financial transactions between approximately 2013 and 2016, more than $2 billion was borrowed through loans guaranteed by the Mozambican government.

It said over the course of the transactions, the co-conspirators acted to defraud investors.

Three state-owned companies were created to undertake maritime projects but were fronts to raise money to enrich themselves, and “intentionally diverted portions of the loan proceeds to pay at least $200m in bribes and kickbacks to themselves, Mozambican government officials and others,” the indictment read.

Mr Chang, 63, signed off on the guarantees as finance minister, but did not disclose them. When the guarantees were revealed in 2016, foreign donors including the International Monetary Fund (IMF) cut off support for Mozambique, plunging the southern African country into a debt crisis that still plagues it two years later.

Prosecutors said at least $200 million was diverted to the defendants and other Mozambican government officials. The defendants concealed the misuse of the funds and misled investors abroad about Mozambique’s creditworthiness.

The companies missed more than $700 million in loan payments after defaulting in 2016 and 2017, the indictment said.

In a statement, Credit Suisse said the three former employees had been accused by US authorities of “circumventing our internal controls” in a fraud connected to the Mozambican government.

“No action has been taken against Credit Suisse. 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,” it said.
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