A major scandal over at Credit Suisse bank has landed two of its execs in hot water and may land them in prison. One of the bankers has just pled guilty to U.S. charges involving $2 billion in illegal Mozambique loans.
“Detelina Subeva, 37, pleaded guilty to one count of money laundering conspiracy before U.S. District Judge William Kuntz in Brooklyn, New York. Subeva is one of three Credit Suisse bankers charged by U.S. prosecutors in January with taking part in the scheme,” Reuters reported.
According to Subeva, a Bulgarian citizen, in 2013 her boss, Andrew Pearse, informed her he had gotten a $1 million kickback in connection with a $372-million loan to a Mozambican state-owned company. The kickback came from Abu Dhabi-based, naval construction firm Privinvest, which had contracted with Mozambican state-owned companies.
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In the so-called “tuna bonds” scandal Pearse and his co-accused allegedly went around Credit Suisse’s internal controls to achieve personal profit by setting up subsidiaries with Privinvest, which is owned by Lebanon-born French billionaire Iskandar Safa.
“Mozambique government officials created three companies to undertake maritime projects – surveillance, tuna fishing and building, and maintaining ship yards. The companies contracted Privinvest to undertake the projects.
To pay for the projects, Mozambique — one of the poorest countries in the world — borrowed more than $2 billion from Credit Suisse and sold the loans to investors worldwide, according to a U.S. indictment, Stuff reported.
Mozambique’s former Finance Minister Manuel Chang was also listed as a defendant. All those involved are accused of creating the maritime projects as fronts for the loans while diverting at least $200 million in bribes and kickbacks to themselves, officials and others.
Subeva’s sentence could range from no prison to as long as 20 years, Bloomberg reported. Pearse has also been charged, along with another former Credit Suisse banker, Surjan Singh. Pearse and Singh are fighting extradition from the UK to the U.S.
Mozambique is one of the most indebted countries in the world and after it admitted in 2016 that it had guaranteed loans it had not disclosed foreign donors cut off support, triggering a currency collapse and a default on its sovereign debt.
There has been no official comment from Credit Suisse CEO Tidjane Thiam, a French-Ivorian banker who has brought “a revolution” to the international bank.
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