By Luc Cohen
NEW YORK (Reuters) – A former Mozambique finance minister was sentenced on Friday to 8-1/2 years in prison after being found guilty of participating in a fraud involving $2 billion in loans to three state-owned companies to develop the southern African country’s fishing industry.
Manuel Chang, 69, was convicted in August by a Brooklyn jury of conspiracy to commit wire fraud and conspiracy to commit money laundering in the “tuna bonds” case, following a four-week trial.
U.S. District Judge Nicholas Garaufis imposed the sentence. The judge said he would recommend Chang be credited for the approximately six years he had been in custody awaiting trial, meaning he would be eligible to be released from U.S. prison and deported to Mozambique after 2-1/2 years
Prosecutors with the Brooklyn U.S. Attorney’s office had urged a sentence of 11-1/4 and 14 years in prison.
“The defendant, a corrupt public official, placed his own country, one of limited means and resources, on the hook for $2 billion in loans it ultimately could not pay, so that he and his criminal partners could pocket tens of millions of dollars for themselves,” prosecutors wrote in a Nov. 13, 2024 filing.
Chang’s lawyers had sought no prison time, in part because their client had already spent more than five years in custody, including four years imprisoned in South Africa while awaiting extradition, and more than a year at the Metropolitan Detention Center in Brooklyn.
“This period of incarceration already served by … a good, decent man who was attempting to do right by his country is more than sufficient,” his lawyers wrote.
Prosecutors said Emirati-Lebanese shipbuilding firm Privinvest paid Chang $7 million in bribes, in exchange for his approving a Mozambique government guarantee for loans from banks including Credit Suisse to three state-backed companies.
The loans were meant to develop Mozambique’s fishing industry and improve maritime security, but the projects collapsed and the state-backed companies defaulted, leaving investors with millions of dollars in losses, prosecutors said.
Donors such as the International Monetary Fund temporarily halted support to Mozambique, triggering a currency collapse and financial turmoil.
Chang pleaded not guilty. His lawyers argued that he approved the government guarantee because Mozambique’s president wanted it, and there was no evidence the $7 million was intended for Chang. Chang is expected to appeal his conviction.
Credit Suisse, since taken over by UBS, agreed in 2021 to pay about $475 million to American and British authorities to resolve bribery and fraud charges related to the scandal. A European subsidiary pleaded guilty in the United States to conspiracy to commit wire fraud.
Last month, London’s High Court denied Privinvest permission to appeal its ruling that Mozambique could collect more than $825 million from Privinvest’s late owner and his companies. Privinvest intends to appeal, its lawyer has said.
(Reporting by Luc Cohen; Editing by Chizu Nomiyama)
