Mozambique Former Finance Minister Gets 20-Year Sentence
Manuel Chang gives a press briefing from IMF Headquarters in 2014 during the time frame in which he committed the acts of fraud and money laundering that resulted in his 20-year prison sentence on Aug. 8. Photo by IMF Photo/Ryan Raeburn.
The four-week trial was held by U.S. District Judge Nicholas G. Garaufis in the Eastern District of New York.
“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,” U.S. Attorney Breon Peace said in an Aug. 8 press release.
“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,”
U.S. Attorney Breon Peace said in an Aug. 8 press release.
Peace said Chang pocketed millions of dollars in bribes to approve projects that failed, “laundering the money and leaving investors and Mozambique stuck with the bill.”
Chang was arrested in South Africa in December 2018 and extradited to New York in July 2023.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said Chang “obtained $7 million in bribe payments in exchange for signing guarantees to secure more than $2 billion in loans” for three maritime projects when he was Mozambique’s finance minister.
“Not only did Chang’s abuse of authority betray the trust of the Mozambican people,” Argentieri continued, “but his corrupt bargain also caused investors — including U.S. investors — to suffer substantial losses on those loans.” She said Chang’s conviction “demonstrates that the Criminal Division is committed to combatting foreign corruption in violation of U.S. law, no matter where these schemes occur or whom they involve.”
“Not only did Chang’s abuse of authority betray the trust of the Mozambican people,” Argentieri continued, “but his corrupt bargain also caused investors — including U.S. investors — to suffer substantial losses on those loans.” She said Chang’s conviction “demonstrates that the Criminal Division is committed to combatting foreign corruption in violation of U.S. law, no matter where these schemes occur or whom they involve.”
Chang and his co-conspirators falsely told banks and investors the loan proceeds would be used for the projects and that the borrower would not pay bribes to Mozambican government officials. They then diverted more than $200 million of the loan proceeds to pay bribes and kickbacks to Chang and others, said prosecutors.
The criminal activity occurred between 2013 and 2015. Co-conspirators included officials of Privinvest Group, a United Arab Emirates-based shipbuilding company. The plot involved ensuring that Credit Suisse Securities (Europe) Limited (CSSEL) and a foreign investment bank arranged for over $2 billion to be extended to three companies owned and controlled by the Mozambican government, according to the press release.
The proceeds were supposed to fund three projects but $200 million was diverted for bribes and kickbacks, said prosecutors. The loans were sold to investors worldwide, defrauding the investors by misrepresenting the use of the loan proceeds. The three Mozambican companies defaulted on their loans, missing more than $700 million in loan payments, causing substantial losses to investors.
In October 2021, CSSEL and its Switzerland-based parent company Credit Suisse AG, pled guilty to defrauding U.S. and international investors in the $850 million loan for one of the projects, according to a DOJ press release. CSSEL pled guilty to conspiracy to commit wire fraud. Credit Suisse AG entered into a deferred prosecution agreement with government agencies. The two companies paid $475 million in penalties and fines to resolve matters with criminal and civil authorities in the U.S. and United Kingdom and to pay restitution to victims, as determined by the court.
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