Ex-Credit Suisse bankers charged with FCPA violations
By Richard L. Cassin, FCPA, January 4, 2019
Jan 4, 2019 - 5:18:49 PM
Three former Credit Suisse bankers were charged in federal court in Brooklyn with bribery and fraud connected to Mozambique’s $2 billion “tuna bonds” scandal.
All three were arrested in London Thursday and released on bail.
Mozambique’s former finance minister, Manuel Chang, was also charged in the indictment. He was arrested Saturday in South Africa.
An executive of an Abu Dhabi-based marine projects company called Privinvest, Jean Boustani (aka Jean Boustany), was also charged. He was arrested at JFK airport in New York Wednesday and is being held.
The indictment was filed on December 19 in the U.S. District Court for the Eastern District of New York (Brooklyn). A partially redacted version (pdf) was posted on the court's docket Thursday.
The defendants allegedly arranged $2 billion in loans to fund a state tuna fishery in Mozambique and hid some of the loans from the International Monetary Fund.
Privinvest allegedly promoted the project and arranged for Mozambique officials to recieve bribes funded from the loans.
The defendants skimmed at least $200 million from the loans, according to the DOJ. The former Credit Suisse bankers kept some of the money and used part of it for the bribes.
The three bankers are Andrew Pearse, Surjan Singh, and Detelina Subeva.
They were charged with four counts of conspiracy -- to violate the FCPA anti-bribery and internal controls provisions, and to commit wire fraud, securities fraud, and money laundering.
Chang, the former Mozambique finance minister, and Jean Boustani were charged with three counts of conspiracy. They weren't charged under the FCPA-related count.
The defendants “created the maritime projects as fronts to enrich themselves and intentionally diverted portions of the loan proceeds” to fund $200 million of bribes and kickbacks, according to the indictment.
None of the bankers arrested in London are U.S. citizens. Pearse is a New Zealand national. Singh is British. And Subeva is Bulgarian.
Pearse and Subeva left Credit Suisse in 2013 to join Privinvest.
Privinvest's Boustani is Lebanese and lives in New York.
The IMF cut off loans to Mozambique after the so-called tuna bond loans were fully uncovered in 2016.
Auditors said later about $500 million from the loans couldn't be accounted for.
The DOJ alleged that the bankers hid the loans from Credit Suisse and concealed information from the bank's compliance group about corruption-related risks.
Credit Suisse told reporters that the DOJ has taken no action against it.
“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,” a Credit Suisse spokesperson said.
In the UK last year, the Financial Conduct Authority dropped an investigation into Credit Suisse’s role in the Mozambique loans.
In July 2018, Credit Suisse paid the DOJ and SEC $76 million to settle FCPA offenses caused by its "princeling program." The Swiss bank's Hong Kong unit awarded jobs to friends and family of Chinese officials to win banking business.
Source: Ocnus.net 2018