By Luke Cohen
NEW YORK (Reuters) – Mozambique’s former finance minister was convicted on Thursday on U.S. criminal charges over his alleged involvement in a fraud involving $2 billion in loans to three state-owned companies to develop the African nation’s fishing industry.
A jury convicted Manuel Chang of conspiracy to commit wire fraud and conspiracy to commit money laundering in the “tuna bond” case, after a three-week trial in federal court in Brooklyn, New York.
Defense attorney Adam Ford told reporters outside the courtroom that Chang plans to appeal the verdict.
Prosecutors said shipbuilder Privinvest paid Zhang $7 million in bribes in exchange for agreeing to the Mozambican government’s loan guarantee for three state-owned companies to develop the African nation’s fishing industry and improve maritime security.
The loans came from Credit Suisse and Russian bank VTB.
Prosecutors said Chang received the money into a Swiss bank account controlled by a friend, and asked other Mozambican officials to contact Privinvest about the payments in an attempt to cover his tracks.
Eventually the projects collapsed, and state-backed companies defaulted on their loans, leaving investors with millions of dollars in losses.
Donors, such as the International Monetary Fund, have temporarily halted their support, leading to a currency collapse and financial turmoil.
“Today’s verdict is an inspiring victory for justice and the people of Mozambique,” said Brion Pace, the top federal prosecutor in Brooklyn, in a statement.
He described Peace Chang as a “high-ranking corrupt government official whose greed and personal interests led to the sale of one of the world’s poorest countries.”
Ford claimed his client agreed to the Mozambican government guarantee because the country’s president wanted it, and said there was no evidence the $7 million was intended for Chang.
“This money never reached Secretary Chang,” Ford said in his closing argument Monday.
In 2019, two Credit Suisse bankers pleaded guilty and testified against Zhang at trial.
Another defendant, Privinvest salesman Jean Boustany, was acquitted at a Brooklyn trial in 2019 after testifying that he had no role in making the loans to investors.
Prosecutors said officials and bankers embezzled $200 million of the $2 billion in funding raised for the projects from 2013 to 2016.
Credit Suisse, which was acquired by Swiss rival UBS, has agreed to pay $475 million to Britain and the United States in 2021 to settle related bribery and fraud charges.
Mozambique on July 29 won most of its $3.1 billion lawsuit in London’s High Court against Emirati-Lebanese company Privinvest for allegedly paying bribes to Mozambican officials and Credit Suisse bankers to secure favorable terms.
A Privinvest spokesman said the company intends to appeal the court ruling accusing it of paying bribes to Zhang, and that it would be unfair to pay hundreds of millions of dollars in damages.