Mozambique’s Former Finance Minister Faces Trial in New York Over $2 Billion Bond Fraud Scandal

Manuel Chang, Mozambique’s former Finance Minister, is set to face a criminal trial in New York on Monday, accused of playing a key role in a massive $2 billion bond fraud scandal that left the east African nation reeling.

The Scandal Unfolded

The so-called “tuna bond” scandal involved Credit Suisse bankers and Mozambique’s government conspiring to take the country deeper into debt with loans for dubious maritime projects, including shipyards, ships to combat piracy, and a tuna fishing fleet. Prosecutors claim Chang pocketed $5 million in bribes and facilitated the laundering of $200 million in money funneled to Mozambican officials.

The Consequences

The scandal has had far-reaching consequences for Mozambique, including:

A severe financial crisis just as it was preparing to reap the benefits of a massive offshore natural gas discovery
A settlement tied to the tuna bond scandal, where the country agreed to pay creditors $220 million
Bribery and corruption cases on three continents
The imprisonment of the son of a former Mozambican president

Credit Suisse’s Role

Credit Suisse paid almost $475 million in 2021 to resolve multiple investigations into its role in the scandal. Former Credit Suisse banker Andrew Pearse is set to testify against Chang, admitting to receiving at least $45 million for his role in arranging the loans.

The Trial

Chang faces up to 30 years in prison if convicted of wire fraud and money laundering. His trial is set to begin on Monday in Brooklyn, New York. Chang’s lawyers have called the indictment “fatally flawed” and argue that there is no evidence linking him to any wrongdoing in the United States.

Timeline

2013: The scandal was uncovered when it emerged that Mozambique had taken on massive debt for dubious projects
2021: Credit Suisse paid almost $475 million to resolve multiple investigations into its role in the scandal
Monday (date): Chang’s trial is set to begin in Brooklyn, New York