Uncategorized - November 29, 2019

Prosecution’s Grand Narrative in Mozambique ‘Tuna Boat’ Case Collapses

Prosecution’s Grand Narrative in Mozambique ‘Tuna Boat’ Case Collapses

By Gil Kapen

The government’s fraud and money-laundering case against Jean Boustani, a Lebanese boat salesman, has not lived up to its billing. Despite prosecutors’ promise of a vast conspiracy, Boustani now stands accused, in effect, of being a lone conspirator. Meanwhile, his alleged partners in crime, a trio of former Credit Suisse bankers, have each pleaded guilty to a single conspiracy count. In other words, Boustani’s trial in a federal court in Brooklyn, is looking like a legal letdown.

Last winter, the prosecution publicly said it would prove that Boustani was at the center of a conspiracy where several defendants “orchestrated an immense fraud and bribery scheme that took advantage of the U.S. financial system.” In a fraud disguised as a $2 billion sale of ships and systems to the government of Mozambique, the conspirators, led by Boustani, lined “their own pockets with hundreds of millions of dollars.” Now, almost a year later after a sometimes contradictory display of prosecution evidence, the government’s narrative is a shadow of its former self. Boustani is clearly nothing like the criminal “mastermind” the government claims him to be.

Instead, the three former Credit Suisse bankers have confessed their own guilt and Manuel Chang, Mozambique’s former finance minister, who was the center-piece of the government’s initial indictment, has yet to brought to the U.S. from South Africa.

In March, the prosecution’s press release blared: “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”.

Since then, the wayward bankers each arrived in the U.S. and pleaded guilty to a single count of conspiracy. In May, Detelina Subeva, pleaded guilty to the charge that she helped launder money from a kickback scheme involving loans to state-owned companies in Mozambique. At the same time, however, Subeva pleaded not guilty to three other fraud counts. Her plea satisfied prosecutors.

To be clear, Credit Suisse, Subeva’s former employer, made the loans, not Boustani’s employer, Privinvest, a Middle East-based shipbuilder. Even more glaring, Subeva never testified at Boustani’s six-week trial. Apparently, prosecutors came to believe that the native of Bulgaria had little of value to say.

In July, Andrew Pearse, a senior banker, took a path similar to that trodden by Subeva. He pleaded guilty to one count of conspiracy to commit wire fraud and denied his guilt on three remaining counts.

As was the case with Subeva, the government accepted his plea. Over the course of Boustani’s trial, it emerged that Pearse and Subeva, who were both married, had become romantically involved as well as partners in crime.

During cross-examination, Pearse had numerous memory lapses and struggles with facts. He testified that he did not recall whether he had attempted to hide his assets by transferring $267,000 to his wife after he had been arrested. He also admitted to treating his own personal “beliefs” as the truth.

Then in September, Surjan Singh, who worked with Pearse and Subeva at Credit Suisse, pleaded guilty to but one count of conspiracy to commit money laundering. As for the remaining conspiracy charges, which also included alleged violation of the Foreign Corrupt Practices Act, Singh pleaded not guilty.

At trial in Brooklyn’s federal court, Singh offered testimony that, like Pearse, was replete memory lapses. For example, Singh had difficulty remembering that he had once been named the executor of Pearse’s estate. Likewise, Singh couldn’t readily recall whether he had threatened to tell Pearse’s wife about Pearse having an affair with Subeva.

Once again with Singh, prosecutors had accepted a guilty plea and in the process had walked away from their earlier narrative — namely that many conspirators worked in concert to commit fraud and conspiracy in the U.S. Suddenly neither the scope nor the magnitude of the crimes so large nor were the actions taken in America.

What was left was an old-fashioned commercial kickback scheme that involved, not U.S. investors, but the bankers’ employer, Credit Suisse, which is based in Europe. Indeed, all three of the Credit Suisse bankers took all of their alleged illicit actions in Europe or Africa. Boustani had never even stepped foot in the U.S. until he was detained while passing through a New York airport earlier this year.

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