Bribes, Lies and Money-Laundering Case Ready for U.S. Jury
Bribes, Lies and Money-Laundering Case Is Ready for U.S. Jury
It’s a case of bribes, kickbacks, lies and money laundering in Mozambique, a U.S. prosecutor told a jury in Brooklyn that is set to decide whether a Privinvest Group salesman defrauded U.S. investors in what turned into a $2 billion loan scandal.
Jean Boustani is accused of paying Mozambican government officials more than $150 million in bribes and an additional $50 million in kickbacks to three Credit Suisse Group AG bankers who arranged the loans. The payments were skimmed from tens of millions of dollars in overcharges to keep the “sinister” scheme under wraps, Assistant U.S. Attorney Hiral Mehta told the jury Thursday.
“This is Mozambique and it was a perfect opportunity for Jean Boustani and Privinvest, the global shipping company, to make money,” Mehta said in his closing argument. “Ask yourselves, who put this all together? Who’s the man at the center of the scheme? It’s the defendant, Jean Boustani. He’s the central figure.”
The jury is to begin deliberations Friday.
American investors were defrauded after they bought into loans arranged by the Credit Suisse bankers and Mozambique, one of the world’s poorest countries, plunged into debt by financing dubious maritime projects, like unmanned patrol ships that cost millions of dollars, according to prosecutors.
Mehta said the government’s evidence shows Boustani and Privinvest overcharged Mozambican-owned companies that got the loans -- ProIndicus, Ematum and MAM -- skimming millions of dollars in profits for themselves and their accomplices.
For example, a fleet of coastal-monitoring vessels cost Privinvest $174 million but the company charged Mozambique $354 million, Mehta said.
Defense lawyer Randall Jackson responded in his closing argument by accusing the prosecutors of failing to prove Boustani defrauded American investors or knowingly laundered money. There was no evidence he played any role in selling off parts of the loan, a job he said was handled by the bankers at Credit Suisse and Russian bank VTB Group, said Jackson, who argued Boustani was unaware the loans would be syndicated and later sold off to U.S. investors.
“Jean never met, spoke to, had a relationship or lied to any investor,” Jackson said. “At the end of a six-week trial the government is about as close to meeting their burden of proof in this case as the Brooklyn Bridge is to South Africa.”
Privinvest met the terms of its contracts, delivering the maritime equipment it agreed to sell to the Mozambican companies under the loan contracts, he said. “Mozambique got each and every thing that Privinvest promised,” he said. “What kind of fraud looks like that?”
The trial featured the testimony of two bankers who pleaded guilty to accepting millions of dollars in bribes from Boustani.
Former Credit Suisse banker Andrew Pearse testified he was having an affair with Detelina Subeva, a subordinate at the bank. Eager to travel with her, he said he took up Boustani’s offer to go into business with him and his boss, Iskandar Safa, the French-Lebanese billionaire who is a founder and co-owner of Privinvest. Pearse testified he collected $45 million in kickbacks for arranging two of the loans. Subeva has also pleaded guilty.
Pearse’s successor, Surjan Singh, testified Boustani helped him set up a bank account in Abu Dhabi to collect $5.7 million in kickbacks. Boustani embraced him, saying “we’re brothers,” and promised he would “look after me,” said Singh, who said he understood that meant he’d keep receiving bribes. The relationship soured when the money dried up after Mozambique told the bank it wouldn’t be able to meet repayment deadlines.
Boustani took the stand in his own defense and told jurors if he made payments, they were “success fees” to agents who helped arrange loans and make introductions. He spent three days testifying and insisted he never defrauded investors or knew money for payments or loans was going through U.S. banks.
When a Mozambican who said was working on behalf of the government asked him for a $50 million bribe, Boustanai said, he rushed to inform Armando Guebuza, then president of Mozambique, who sternly instructed him, “Nobody, not me, nor any public official in Mozambique, will be allowed to take one penny.”
Mehta argued that, contrary to Boustani’s claims, the evidence showed Privinvest paid the president’s son at least $55 million for access to his father and that Boustani pocketed $15 million for himself. The evidence shows Privinvest also inflated the costs of equipment, sometimes by 100%, to bankroll illicit payments, he said.
“The president of Mozambique said, ‘Not one penny,’” Mehta said. “But $100 million? No problem. They’re literally having the people of Mozambique take out loans they can’t pay for so Privinvest can pay bribes to their own officials. They’re not paying it. Mozambicans are.”
The case is U.S. v. Boustani, 18-cr-681, U.S District Court, Eastern District of New York (Brooklyn).
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 Jeffrey, Joe Schneider
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