Bribes, kickbacks, lies and money laundering in Mozambique

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IT’S a case of bribes, kickbacks, lies and money laundering in Mozambique, a US prosecutor told a jury in Brooklyn that is set to decide whether a Privinvest Group salesperson defrauded US investors in a scheme that turned into a $2bn loan scandal.

Jean Boustani is accused of paying Mozambican government officials more than $150 million in bribes and an additional $50 million in kickbacks to three Credit Suisse bankers who arranged the loans. The payments were skimmed from tens of millions of dollars in overcharges to keep the ‘sinister’ scheme under wraps, assistant US attorney Hiral Mehta told the jury on Thursday.

‘This is Mozambique and it was a perfect opportunity for Jean Boustani and Privinvest, the global shipping company, to make money.’ Mehta said in his closing argument. ‘Ask yourselves, who put this all together? Who’s the man at the centre of the scheme? It’s the defendant, Jean Boustani. He’s the central figure.’

The jury is to begin deliberations on Friday.

US investors were defrauded after they bought into loans arranged by the Credit Suisse bankers and Mozambique, one of the world’s poorest countries, plunged into debt by financing dubious maritime projects, like unmanned patrol ships that cost millions of dollars, according to prosecutors.

Mehta said the government’s evidence shows Boustani and Privinvest overcharged Mozambican-owned companies that got the loans — ProIndicus, Ematum and MAM — skimming millions of dollars in profits for themselves and their accomplices.

For example, a fleet of coastal-monitoring vessels cost Privinvest $174 million but the company charged Mozambique $354 million, Mehta said.

Defence lawyer Randall Jackson responded in his closing argument by accusing the prosecutors of failing to prove Boustani defrauded US investors. There was no evidence he played any role in the selling of parts of the loan, a job he said was handled by the bankers at Credit Suisse and Russian bank VTB Group, Jackson said.

‘Jean never met, spoke to, had a relationship with or lied to any investor,’ Jackson said. ‘At the end of a six-week trial, the government is about as close to meeting their burden of proof in this case as the Brooklyn Bridge is to SA [South Africa]. That is, not close at all.’

Privinvest met the terms of its contracts, delivering the maritime equipment it agreed to sell to the Mozambican companies under the loan contracts, he said. ‘Mozambique got each and every thing that Privinvest promised,’ he said. ‘What kind of fraud looks like that?’

The trial featured the testimony from two bankers who pleaded guilty to accepting millions of dollars in bribes from Boustani.

Former Credit Suisse banker Andrew Pearse testified he was having an affair with Detelina Subeva, a subordinate at the bank. Eager to travel with her, he said he took up Boustani’s offer to go into business with him and his boss, Iskandar Safa, the French-Lebanese billionaire who is a founder and co-owner of Privinvest. Pearse testified he collected $45 million in kickbacks for arranging two of the loans. Subeva has also pleaded guilty.

Pearse’s successor, Surjan Singh, testified Boustani helped him set up a bank account in Abu Dhabi to collect $5.7 million. Boustani embraced him, saying, ‘We’re brothers,’ and promised he would ‘look after me,’ said Singh, who said he understood that meant he’d keep receiving bribes.

Boustani took the stand in his own defence and told jurors that if he made payments, they were ‘success fees’ to agents who helped get the loans through. He spent three days testifying and insisted he never defrauded investors nor knew money for payments or loans was going through US banks.

Prosecutors say Boustani made $15 million for himself.

 

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