A former Credit Suisse Group AG banker has admitted taking millions of dollars in kickbacks as part of a scam that involved as much as $2bn (around R28bn) 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 US 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.
READ: SA yet to decide on Mozambique extradition, state says
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 $2.5M as well as other unspecified properties. He was freed on a $2.5M bond and allowed to return to his home in the UK. He's to be monitored electronically and he was ordered to check in weekly with his lawyers in the UK as well as call the FBI agents handling the case once a week.
US District Judge William Kuntz didn't set a sentencing date.
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 $50m 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 US. To date, the companies controlled by Mozambique's government have failed to make more than $700m 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.