At least two former Credit Suisse Group AG bankers will testify for the US at a federal trial this week, describing their roles in what the Justice Department says was a $2 billion (almost R30bn) kickback scam in Mozambique.
Andrew Pearse, who headed the global financing group in the bank's London office, will be one of the government's first witnesses at the trial of Jean Boustani, a former executive at the ship builder Privinvest Group, defense lawyers said in a letter to the court Monday. Detelina Subeva, who worked for Pearse, will also testify for the US, according to a person with knowledge of the matter who asked not to be identified.
The three were part of what prosecutors called "a brazen international criminal scheme" that helped one of the world's poorest countries borrow billions for dubious maritime projects, including one to ward off pirates. Instead, the government claims, they and others plundered the fund raising, diverting at least $200 million for personal gain. Foreign aid was suspended, and the southern African nation defaulted on its debt in 2017.
Boustani, a Lebanese national, is accused of procuring contracts to sell ships and related equipment to three Mozambican entities while secretly agreeing to pay $50 million in bribes to government officials and $12 million to conspirators at Privinvest. He faces charges of conspiracy to commit wire fraud, securities fraud and money laundering. He denies wrongdoing.
Pearse pleaded guilty to wire fraud this year, admitting he helped arrange bank loans to three companies controlled by the Mozambican government and got millions of dollars in kickbacks from Privinvest. Subeva pleaded guilty to conspiracy to launder funds, as did a third former Credit Suisse banker, Surjan Singh.
Pearse's lawyer, Lisa Cahill, declined to comment. Neither Amanda Raad, a lawyer for Subeva, nor Alison Van Horn, a lawyer for Singh, returned an email seeking comment.
Karina Byrne, a spokeswoman for Credit Suisse, declined to comment on the case, as did a spokesman for US Attorney Richard Donoghue in Brooklyn, New York. The bank hasn't been accused of wrongdoing.
When Pearse pleaded guilty, he named Boustani as well as others at the ship builder, including Chief Executive Officer Iskandar Safa and Chief Financial Officer Najib Allam. With their knowledge, Pearse said in court, Privinvest "wired me millions of dollars in unlawful kickbacks from loan proceeds and illegal payments for my assistance in securing loans made by Credit Suisse."
Boustani's lawyers, Randall Jackson and Michael Schachter, argue their client believed the Mozambique projects "would be revenue generating and would inspire confidence in the multinational corporations developing natural gas fields in northern Mozambique."
Prosecutors say Privinvest officials charged Mozambique inflated prices for equipment and services, freeing up money for the bribery scheme. As part of the deal, they say, Mozambican officials diverted some of the money to buy pirate patrol boats, according to Stratfor, a security firm.
Pearse and Subeva left Credit Suisse in 2013 and began working "for the benefit" of Privinvest, prosecutors allege, with Privinvest wiring "bribe and kickback payments of more than $45 million" to a bank account Pearse opened in Abu Dhabi. Pearse shared some of those payments with Subeva, both said at their guilty pleas.
Privinvest, which isn't charged, denies wrongdoing, saying it "delivered on its contractual commitments and took extraordinary steps to help make the projects succeed," according to spokesman Stuart Leasor.
Boustani, one of eight people originally charged, is the only defendant to go to trial. Neither Allam nor two Mozambican officials accused in the case are in US custody. Manuel Chang, formerly the finance minister of Mozambique, has been held in South Africa at the request of the US since he was arrested in December. He's denied wrongdoing.
Boustani has been held without bail at a federal jail in Brooklyn since his arrest on his arrival at John F. Kennedy Airport in January. The trial is scheduled to last about six weeks.