Former Mozambican Finance Minister Manuel Chang was convicted Thursday in a financial conspiracy case that welled up from from his country’s “tuna bond” scandal and swept into a U.S. court.
A federal jury in New York delivered the verdict.
Chang was accused of accepting payoffs to put his African nation secretly on the hook for big loans to government-controlled companies for tuna fishing ships and other maritime projects. The loans were plundered by bribes and kickbacks, according to prosecutors, and Mozambique ended up with $2 billion in “hidden debt,” spurring a financial crisis.
“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,” Brooklyn-based U.S. Attorney Breon Peace said in a statement.
Messages seeking comment were sent to Chang’s attorneys and to Mozambique’s embassy in Washington. Chang was his country’s top financial official from 2005 to 2015.
Chang had pleaded not guilty to the U.S. conspiracy charges. His lawyers said he was doing as his government wished when he signed off on pledges that Mozambique would repay the loans, and that there was no evidence of a financial quid-pro-quo for him.
No sentencing date was set for Chang, 48. The charges carry the possibility of up to 20 years in prison, though sentencing guidelines for any given case can vary depending on a defendant’s history and other factors.
Between 2013 and 2016, three Mozambican-government-controlled companies quietly borrowed $2 billion from major overseas banks. Chang signed guarantees that the government would repay the loans — crucial assurances to lenders who likely otherwise would have shied away from the brand-new companies.
The proceeds were supposed to finance a tuna fleet, a shipyard, and Coast Guard vessels and radar systems to protect natural gas fields off the country’s Indian Ocean coast.
But bankers and government officials looted the loan money to line their own pockets, U.S. prosecutors said.
“The evidence in this case shows you that there is an international fraud, money laundering and bribery scheme of epic proportions here,” and Chang “chose to participate,” Assistant U.S. Attorney Genny Ngai told jurors in a closing argument Monday.
Prosecutors accused Chang of collecting $7 million in bribes, wired through U.S. banks to European accounts held by an associate.
Chang’s defense said there was no proof that he actually was promised or received a penny.
The only agreement Chang made “was the lawful one to borrow money from banks to allow his country to engage in these public infrastructure works,” defense lawyer Adam Ford said in his summation Monday.
The companies defaulted on the loans, leaving Mozambique with a $2 billion debt, about 12% of the nation’s gross domestic product at the time. A country that the World Bank had designated one of the world’s 10 fastest-growing economies for two decades was abruptly plunged into financial upheaval.
Growth stagnated, inflation spurted, the currency lost value, international investment and aid plummeted and the government cut services. Nearly 2 million Mozambicans were forced into poverty, according to a 2021 report by the Chr. Michelsen Institute, a development research body in Norway.
The loans had been sold to investors, including through the “tuna bonds.” Some handled money for pension and retirement funds, according to prosecutors.
Investors in the U.S. and elsewhere incurred “substantial losses,” Nicole M. Argentieri, the assistant attorney general who heads the Justice Department’s Criminal Division, said in a statement after the verdic.t
Mozambique’s government has reached out-of-court agreements with creditors in an attempt to pay down some of the debt. At least 10 people have been convicted in Mozambican courts and sentenced to prison over the scandal, including Ndambi Guebuza, the son of former Mozambican President Armando Guebuza.
Chang was arrested at Johannesburg’s main international airport in late 2018, shortly before the U.S. indictment against him and several others became public. After years of fighting extradition from South Africa, Chang was brought to the U.S. last year.
Two British bankers pleaded guilty in the U.S. case, but a jury in 2019 acquitted another defendant, a Lebanese shipbuilding executive. Three other defendants, one Lebanese and two Mozambican, aren’t in U.S. custody.
In 2021, a banking giant then known as Credit Suisse agreed to pay at least $475 million to British and U.S. authorities over its role in the Mozambique loans. The bank has since been taken over by onetime rival UBS.