Tuesday, July 23, 2019

Ex-Credit Suisse Banker Admits Kickbacks in Mozambique Scam
By Patricia Hurtado
July 20, 2019, 12:47 PM EDT

 Andrew Pearse among ex-bankers charged in $2 billion scandal
 It’s not clear if Pearse is cooperating with U.S. prosecutors

Photo: Andrew Pearse on March 8.

A former Credit Suisse Group AG banker admitted taking millions of dollars in kickbacks as part of a scam that involved as much as $2 billion in loans to Mozambique state-owned companies.

Andrew Pearse, 49, a former managing director, made the admission Friday as he pleaded guilty to wire fraud in federal court in Brooklyn, New York.

It’s not clear whether Pearse is cooperating with U.S. prosecutors. His plea agreement and all other related records were placed under seal. His lawyer, Lisa Cahill, and Mark Bini, a federal prosecutor, both declined to comment after court.

Pearse is the second former Credit Suisse banker to plead guilty in the fraud and money-laundering scam. Detelina Subeva, a former vice president in the bank’s global financing unit, pleaded guilty in May to one count of conspiracy to launder funds.

Karina Byrne, a spokeswoman for Credit Suisse, declined to comment on the case.

Pearse admitted helping arrange bank loans to three companies owned and controlled by the Mozambican government and got millions of dollars in kickbacks in return. He identified the companies as Proindicus SA, Mocambicana de Atum SA, or “EMATUM,” and Mozambique Asset Management, or “MAM.”

Proindicus was to perform coastal surveillance, EMATUM was to engage in tuna fishing while MAM was to build and maintain shipyards, prosecutors said.

Pearse, who could face up to 20 years in prison, agreed to forfeit $2.5 million as well as other unspecified properties. He was freed on a $2.5 million bond and allowed to return to his home in the U.K. He’s to be monitored electronically and he was ordered to check in weekly with his lawyers in the U.K. as well as call the FBI agents handling the case once a week.

U.S. District Judge William Kuntz didn’t set a sentencing date.

Privinvest Connection

Pearse said that he was aware of risks posed of doing business in the region. He said the bribes and illicit payments originated with officials at Privinvest Group, an Abu Dhabi-based holding company whose units include a shipbuilder. Privinvest was hired to provide equipment and services to complete the maritime projects, according to prosecutors.

Privinvest officials “wired me millions of dollars in unlawful kickbacks from loan proceeds and illegal payments for my assistance in securing loans by Credit Suisse,” Pearse said in court. The money came from Privinvest officials like Jean Boustani, a salesman and negotiator at the company, and Iskandar Safa, the chief executive officer, he said.

“Neither Privinvest, nor its CEO, are parties to the U.S. proceedings you reference,” the company said in a statement. “Two employees of Privinvest have been named as defendants. Privinvest takes such matters seriously, but rejects any claim that it acted improperly with respect to the supply agreements.”

The firm added: “Privinvest delivered on its contractual commitments and took extraordinary steps to help make the projects succeed. ”

Pearse said that Boustani told him Privinvest had also paid at least $50 million to the son of Mozambique’s then president as part of the scheme. Boustani, who was arrested at John F. Kennedy airport in New York in January, has pleaded not guilty. Boustani’s lawyer, Michael Schachter, declined comment.

Prosecutors said the loans were sold to investors around the world, including in the U.S. To date, the companies controlled by Mozambique’s government have failed to make more than $700 million of loan repayments that have come due, according to the government.

The indictment, filed in January, alleges the bankers helped officials in one of the world’s poorest countries go deep into debt for legally dubious projects whose rationale were flimsy. The loans were concealed from foreign donors, who suspended aid after they were revealed, leading the southern African nation to default on its debts early last year.

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