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Jury Sees Mozambican Emails U.S. Argues Are Proof of $2 Billion Bribery Plot

Jury Sees Mozambican Emails U.S. Argues Are Proof of $2 Billion Bribery Plot

(Bloomberg) --

Jurors in the U.S. bribery trial of a salesman for Privinvest Group were shown scores of emails that prosecutors say reveal how the shipbuilder played along with government officials in Mozambique in a $2 billion kickback scam.

When Privinvest’s Jean Boustani first approached Mozambicans about getting the company hired to build maritime security, a man who prosecutors say was acting on behalf of then-President Armando Guebuza emailed Boustani, saying all that was needed was a “payment.”

“You will agree with me if I say that in democratic governments like ours people come and go,” Teofilo Nhangumele wrote in the November 2011 message. “Let us agree and look at project in two distinct moments. One moment is to massage the system and get the political will to go ahead with the project. The second moment is the project implementation/execution."

Boustani replied, “This is good news,“ adding later, “Our group operates with the principal of ‘success fee’ in favor of our local partners which will be added to the final project value.”

Boustani, who’s charged with defrauding U.S. investors in the loans and not foreign bribery, denies the charges. His lawyer, Michael Schachter, told jurors in his opening argument that payments to officials by Boustani, a Lebanese national, were “the cost of doing business” in Mozambique.

Boustani is one of eight people -- including three former Credit Suisse Group AG bankers, Mozambique’s ex-finance minister and a senior intelligence officer -- who U.S. prosecutors say created the maritime projects to funnel bribes and kickbacks.

The government says that Privinvest paid $150 million to Mozambican officials as part of the scheme and an additional $50 million in kickbacks to Credit Suisse bankers. Three former bankers have pleaded guilty, including Andrew Pearse, who was the trial’s first witness.

rosecutors presented evidence that Privinvest inflated the cost of some materials it sold the Mozambican companies. For example, a spreadsheet showed that ProIndicus, a maritime
monitoring company, was charged as a $355 million venture even though it actually cost $170 million.

In addition, two mobile radar stations that cost Privinvest $1.6 million to build were inflated to $3.3 million, while two offshore patrol vessels that cost Privinvest $55 million were billed at $114.5 million.

Jurors also saw a spreadsheet compiled by Najib Allam, Privinvest’s chief financial officer, which details the tens of millions of dollars paid out in the scheme, including $11.8 million that the document says went to Guebuza’s son, Armando Ndambi Guebuza.

Earlier at the trial, Pearse testified that Boustani told him he’d paid the younger Guebuza $50 million as part of the loan scheme. The younger Guebuza is one 20 people who Mozambique has charged in the fraud. He’s pleaded not guilty to the charges.

Nhangumele, who was indicted by the U.S. along with Boustani, was also charged with corruption in Mozambique and remains there. He has denied wrongdoing. Allam, who was also charged, isn’t in the U.S.

Privinvest, which hasn’t been charged by the U.S. and denies wrongdoing, said in a statement it “wins business based on its record of innovation and successful project delivery.”

“Privinvest does not pay bribes to win business and did not pay bribes in relation to the Mozambique maritime projects,” the company said. “Privinvest is proud of its work delivering the Mozambique projects and regrets that Mozambique did not implement the projects and seize an opportunity for its people.”

The trial continues Tuesday and the judge has said it may not finish until Nov. 22.

The case is U.S. v. Boustani, 18-cr-681, U.S District Court, Eastern District of New York (Brooklyn).

--With assistance from Borges Nhamire and Matthew Hill.

To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Blumberg, Joe Schneider

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