Mozambique's Former Finance Minister Indicted Alongside (Others- Alleged $2 Billion Fraud and Money

[nitpicker]

https://www.justice.gov/opa/pr/mozambique-s-former-finance-minister-indicted-alongside-other-former-mozambican-officials

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Thursday, March 7, 2019

Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican Officials, Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme that Victimized U.S. Investors

A four-count indictment was returned on Dec. 19, 2018, by a grand jury in the Eastern District of New York, charging two executives of a shipbuilding company, three former senior Mozambican government officials, and three former London-based investment bankers for their roles in a $2 billion fraud and money laundering scheme that victimized investors from the United States and elsewhere.
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The indictment alleges that between approximately 2013 and 2016, the co-conspirators organized for more than $2 billion in three loans to be arranged by Investment Bank and another foreign bank. The loans were made to companies owned and controlled by the Mozambican government: Proindicus S.A., Empresa Moçambicana de Atum, S.A. (EMATUM) and Mozambique Asset Management (MAM). The money was purportedly to be used to fund three maritime projects for which the shipbuilder, Privinvest, would provide the equipment and services. Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing, and MAM was to build and maintain shipyards. Chang, in his capacity as minister of finance, signed guarantees on behalf of Mozambique for all three fraudulent loans. Singh signed the agreements on behalf of the investment bank for the two loans on which the bank acted as primary arranger. The investment bank subsequently paid the loans directly to Privinvest.

As further alleged in the indictment, the co-conspirators facilitated Privinvest’s criminal diversion of more than $200 million in loan proceeds, including more than $150 million in bribe payments to Chang and other Mozambican government officials that Privinvest paid to ensure that Mozambique would enter into the loan arrangements. In addition to the bribe payments, the alleged fraud also included approximately $50 million in kickback payments to Pearse, Singh, and Subeva, who assisted the conspirators to obtain financing for the loans through their investment bank and a second foreign investment bank. Pearse, Singh, and Subeva, along with the other members of the conspiracy, allegedly subsequently sold the loans to investors worldwide, including in the United States. Moreover, the participants in the scheme allegedly conspired to defraud these investors by misrepresenting how the loan proceeds would be used, the amount and maturity dates of other loans and debt Mozambique was obligated to pay, and the ability of Mozambique or its state-owned entities to repay the loans.

Mozambique and its state-owned entities have thus far allegedly failed to make more than $700 million of repayments that have become due on the loans.
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