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.Privinest 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. Safa, who hasn’t been
accused of any wrongdoing, couldn’t be located for comment. An email sent to
Privinvest after business hours wasn’t immediately returned. 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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