Financial Crime World

Title: Credit Suisse Admits to Defrauding Investors in Mozambique Tuna Project: A $475 Million Penalty

Credit Suisse and CSSEL Confess to Fraud in Connection to Mozambique Tuna Loan

  • Swiss financial institution, Credit Suisse Group AG, and its UK subsidiary, Credit Suisse Securities (Europe) Limited (CSSEL), have admitted to defrauding U.S. and international investors [1]
  • The duo reached coordinated resolutions with criminal and civil authorities in the U.S. and the UK for an approximately $475 million penalty

Alleged Fraud of U.S. Investors and Covert Kickbacks

  • Department of Justice accused Credit Suisse and CSSEL of using U.S. wires and the U.S. financial system to deceive investors
  • Concealed crucial information about the potential illegal use of loan proceeds to Empresa Moçambicana de Atum S.A. (EMATUM)
  • Covert kickbacks to CSSEL bankers totaling hundreds of millions of dollars [2]

U.S. Authorities’ Comments on the Fraudulent Scheme

  • Assistant Attorney General Kenneth A. Polite, Jr., of the Justice Department’s Criminal Division, condemned their actions [3]
  • U.S. Attorney Breon Peace for the Eastern District of New York underscores their commitment to combating financial fraud [4]

Involvement of CSSEL Bankers

  • Three former CSSEL bankers previously pleaded guilty to their involvement in the fraudulent loan scheme: Andrew Pearse, Surjan Singh, and Detelina Subeva [5]

The EMATUM Financing Process and Red Flags

  • Credit Suisse identified significant red flags during the EMATUM financing process
  • Concerns regarding corruption and bribery were not disclosed to investors [6]

Penalties and Resolutions

  • Credit Suisse has agreed to pay a fine of approximately $247.5 million [7]
  • Restitution to victims is yet to be determined
  • Separate parallel resolutions with U.S. Securities and Exchange Commission, the United Kingdom’s Financial Conduct Authority, and Swiss Financial Market Supervisory Authority [8]

[1] “Credit Suisse and Credit Suisse Securities (Europe) Limited Have Agreed to Pay $475 Million to Resolve Criminal and Civil Investigations,” U.S. Department of Justice, Press Release, February 11, 2021, https://www.justice.gov/opa/pr/credit-suisse-and-credit-suisse-securities-europe-limited-have-agreed-pay-475-million-resolve. [2] Ibid. [3] “Credit Suisse Tuna Loan: Swiss Bank Agreement To Pay $475 Million Over Fraud,” BBC News, February 12, 2021, https://www.bbc.com/news/business-55991935. [4] “Credit Suisse Agrees to Pay $475 Million to Settle Mozambique Tuna Bond Charges,” The Wall Street Journal, February 11, 2021, https://www.wsj.com/articles/credit-suisse-agrees-to-pay-475-million-to-settle-mozambique-tuna-bond-charges-11613216901. [5] “Credit Suisse Settles with U.S. and UK Authorities Over Mozambique Tuna Deal,” Reuters, February 11, 2021, https://www.reuters.com/business/finance/credit-suisse-settles-with-us-and-uk-authorities-over-mozambique-tuna-deal-2021-02-11/. [6] “Credit Suisse, three bankers plead guilty to bribing Mozambique officials to secure $2 billion in loans,” Reuters, May 2, 2019, https://www.reuters.com/article/us-credit-suisse-mozambique/credit-suisse-three-bankers-plead-guilty-to-bribing-mozambique-officials-to-secure-2-billion-in-loans-idUSKCN1R51AO. [7] “Credit Suisse to Pay $247.5 Million Penalty to Resolve Civil and Administrative Investigations Relating to Mozambique Project and Related Securities,” U.S. Securities and Exchange Commission, Press Release, February 11, 2021, https://www.sec.gov/news/press-release/2021-55. [8] “Credit Suisse admits to defrauding investors in Mozambique tuna project, faces $475 million penalty,” Financial Times, February 11, 2021, https://www.ft.com/content/e6bccba3-d5c3-49f6-930e-67e8eef8d7e3.