Friday 4 January 2019 9:47 am

Ex-Credit Suisse bankers arrested over ‘$2bn fraud scheme’ in Mozambique

Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

Follow Jess Clark
Three former Credit Suisse bankers were arrested in London yesterday over an alleged $2bn (£1.58bn) fraud scheme involving loans to state-owned companies in Mozambique.

Andrew Pearse, 49, Surjan Singh, 44, and Detelina Subeva, 37, were charged in Brooklyn, New York with conspiring against US anti-bribery law and to commit money laundering and securities fraud, Reuters reported.

The arrest of the former bankers, who have been released on bail while the US seeks extradition, comes five days after former Mozambique finance minister Manuel Chang was arrested in South Africa in connection with the same case.

On Wednesday, Lebanese citizen Jean Boustani, who had worked for an Abu Dhabi-based contractor of the Mozambican companies, was arrested at New York’s John F. Kennedy Airport, Reuters said.

According to the charges, three state-owned companies in Mozambique borrowed more than $2bn through loans guaranteed by the government and arranged by Credit Suisse and another unnamed investment bank.

The companies were created to undertake maritime projects but were really fronts for Chang, Boustani and the three Credit Suisse bankers to pocket the money. Prosecutors said at least $200m was diverted to the individuals and other government officials.

A spokesperson for Credit Suisse said: “Three former Credit Suisse employees have been accused by the US Department of Justice of circumventing our internal controls and using personal email accounts to conceal their involvement in a fraud connected to Mozambican government officials between 2011 and 2013.

“No action has been taken against Credit Suisse. The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank.

“Credit Suisse will continue to cooperate with relevant regulators following these indictments, and separately looks forward to continuing to work with the relevant authorities to move forward with the proposed debt restructuring.”