Surjan Singh, the third of the three former executives of Credit Suisse, charged by the US justice authorities in connection with the scandal of Mozambique's "hidden debts", has pleaded guilty to one count of conspiracy to commit money laundering, according to a report by the Portuguese news agency Lusa.
Singh appeared before the New York court dealing with the case last Friday. With this guilty plea, it seems that the prosecutors have dropped other charges of wire fraud and securities fraud. However, the full details of his plea bargain have not yet been made public.
Two other former Credit Suisse bankers, Detelina Subeva and Andrew Pearse, entered guilty pleas earlier in the year. All three have been freed on bail.
They were all originally arrested in London in January. One by one they have negotiated with the US prosecutors and have made their way to the New York court to enter their guilty pleas.
The accusation against them is that, in 2013 and 2014, they conspired with officials of the Abu Dhabi-based group Privinvest and with figures in the Mozambican government of the time, to ensure that enormous loans were granted to three fraudulent companies, Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management).
In all, the fraud involved loans of over two billion US dollars, granted by Credit Suisse and the Russian bank, VTB. According to the US prosecutors, at least 200 million dollars of the loan money was used for bribes and kickbacks.
When Pearse appeared before the New York judge in July, he made statements that implicated the chief executive officer of Privinvest, Iskandar Safa, in the fraud.
He said that, "Privinvest with the knowledge of its executive Jean Boustani (currently detained in a New York prison), Iskandar Safa and Najib Allam (Privinvest's Chief Finance Officer), wired me millions of dollars in unlawful kickbacks from loan proceeds and illegal payments for my assistance in securing loans made by Credit Suisse".
"I agreed to accept and keep these monies, knowing that they were the proceeds of illegal activity", he said. "I took these actions to enrich myself and my co-conspirators and to benefit Credit Suisse which gained substantial profits from the Proindicus and Ematum loans in which it was involved".
As managing director of Credit Suisse Securities Europe Ltd, Pearse led the team that closed the 372 million dollar loan to Proindicus in February 2013. He said that Boustani "offered to pay me half of the amount by which I, together with others, reduced a subvention fee to be paid by Privinvest in connection with the loan".
"I accepted Boustami's offer", Pearse added, "successfully made efforts to reduce the fees paid by Privinvest, and received payments by wire from Privinvest into a bank account I opened in the United Arab Emirates with the assistance of Privinvest employees. Safa was aware of my agreement with Boustani".
Pearse said he knew that Surjan Singh, "was secretly being paid by Privinvest to aid the conspiracy. Specifically, in September and October 2013 I made two payments of one million dollars each to Singh. The payments, which came from funds I received from Privinvest, were in exchange for Singh's assistance in reducing the subvention fee on Proindicus and for securing Credit Suisse's approval of the Ematum loan".
Pearse explained that he assisted "in bringing about an agreement between Singh and Boustani, of which Safa was aware, under which Singh received payments totalling 4.4 million dollars in exchange for facilitating Credit Suisse's approval of the Ematum loan".
Friday's issue of the independent newssheet "Carta de Mocambique" suggests that the real targets of the US investigations are Credit Suisse and Iskandar Safa.
Credit Suisse has already admitted that Pearse, Subeva and Singh bypassed its internal security systems. This could lay the bank wide open to an enormous fine by the New York, since American investors, who purchased Ematum bonds, and the syndicated Proindicus debt, were among those defrauded.
Key to the fraud was the company Palomar, which is part of the Privinvest group. Safa owned two thirds of the shares in Palomar (through Privinvest Shipbuilding Investments) , and Pearse the other third. Boustani was a Palomar director, and Subeva worked for Palomar at the same time as she was employed by Credit Suisse.
Pearse admitted in July "I agreed with Safa and Boustani that I would receive a percentage of any further Proindicus loan proceeds that Privinvest received after the initial 372 million dollar loan. I subsequently reached similar agreements with Safa and Boustani to receive a percentage of the loan proceeds from the Ematum and MAM transactions, while working as a director at Palomar Holdings".
Credit: Agencia de Informacao de Mocambique