Manuel Chang, the former Finance Minister of Mozambique, was given 102 months in jail for his part in a huge $2 billion scheme of fraud, bribery, and money laundering. This is a big step forward in the fight against international financial crime.
Chang, who is 69 years old, took $7 million in bribes to get fake loans for marine projects.
But a lot of the loan money was stolen, which caused investors around the world, including those in the US, to lose a lot of money.
The Unraveling of the Scheme
Court records and trial evidence showed that between 2013 and 2015, Chang and his partners planned a complicated scam.
Chang, in his official role, signed guarantees for three government-controlled companies to get loans. These companies are Proindicus S.A., Empresa Moçambicana de Atum (EMATUM), and Mozambique Asset Management (MAM).
The overall amount of these loans was more than $2 billion, and they were supposed to pay for maritime projects like keeping an eye on the coast, fishing for tuna, and keeping shipyards in good shape.
But the projects were just a front. More than $200 million from the loan wasn’t used for what it was meant to do; it was used to pay bribes and fees.
Chang got $7 million for himself, and a big chunk of it was used to make other government leaders and collaborators rich.
Global Impact of the Fraud
The fake loans were put together and sold to buyers around the world, including some from the United States.
These buyers were fooled by false information about how the loan funds would be used, and they lost a lot of money when Proindicus, EMATUM, and MAM stopped paying.
More than $700 million in loan payments were not made, showing how bad the plan was for the economy.
In response to the case, Principal Deputy Assistant Attorney General Brent S. Wible of the Justice Department’s Criminal Division said, “Manuel Chang abused his position as Finance Minister of Mozambique by getting $7 million in bribes in exchange for helping get more than $2 billion in loans.”
He also said that Chang’s acts had broken the trust of the people of Mozambique and tricked investors all over the world.
International Cooperation and Justice
The case shows how foreign and U.S. law enforcement can work together to stop transnational financial crimes.
“Today’s sentence shows that foreign officials who abuse their power to commit crimes against the U.S. financial system will meet U.S. justice,” said Carolyn Pokorny, acting U.S. attorney for the Eastern District of New York.
Several agencies and governments from countries like South Africa, the UK, Switzerland, Spain, and Portugal worked together on the case in a big way.
The New York Field Office of the FBI was very important in finding out about the scheme. Assistant Director James E. Dennehy reaffirmed the agency’s dedication to stopping corrupt activities that target the U.S. banking system.
Credit Suisse’s Involvement
Credit Suisse AG and its subsidiary, Credit Suisse Securities (Europe) Limited (CSSEL), which set up the loans, were also involved in the scam.
Credit Suisse admitted in October 2021 that they had lied to clients about how they would pay for a $850 million loan for the EMATUM project.
Credit Suisse AG agreed not to go to court for a while after CSSEL pleaded guilty to plot to commit wire fraud.
It was part of a coordinated resolution that Credit Suisse paid $475 million to US and UK officials in the form of fines, penalties, and money that was taken back.
Sentencing and Accountability
Manuel Chang was found guilty of conspiracy to commit wire fraud and conspiracy to commit money laundering. This is a big step forward in holding corrupt politicians accountable.
Chang was given a jail sentence and told to give back $7 million. The exact amount of the money he owes will be decided later.
The case was brought by the Fraud Section of the Justice Department and the U.S. Attorney’s Office for the Eastern District of New York. The Office of International Affairs of the Justice Department provided a lot of help.
Broader Implications
This case shows how weak global financial systems are and how important it is for countries to work together to fight crime.
The Money Laundering and Asset Recovery Section (MLARS) of the Justice Department talked about the Bank Integrity Unit’s job to look into financial companies and people whose actions hurt the financial system’s integrity.
As countries and groups work to stop similar schemes, this case is a stark warning of how widespread corruption is and how important it is for everyone to be held accountable.
The sentence given to Manuel Chang makes it clear that people who abuse their power to commit financial crimes will be punished, no matter how high up they are or how complicated their plan is.
This important case not only brings justice to the people of Mozambique, but it also helps investors around the world who lost a lot of money.