Lebanese salesman acquitted in case over $2 bln Mozambique loans

A US jury on Monday cleared a lead salesman for a Lebanese shipbuilding company of charges that he helped to defraud US investors in bonds backed by the Mozambican government.

Jean Boustani, 41, was acquitted of the charges by a jury following a trial in federal court in Brooklyn, which shed new light on a corruption scandal that contributed to Mozambique’s debt default in 2016.

John Marzulli, a spokesperson for federal prosecutors, had no immediate comment.

“Jean never met, spoke to, had a relationship, or lied to any investor,” Randall Jackson, one of Boustani’s lawyers, said in a statement after the verdict. “This is a critical fact.”

The case revolved around three contracts awarded by Mozambique to Boustani’s employer, Privinvest, to build a coastal defense system, a tuna fishing fleet and a shipyard.

The projects were financed with nearly $2 billion in loans from Credit Suisse Group AG and Russian lender VTB.

Prosecutors said Boustani, a Lebanese citizen, paid hundreds of millions of dollars in bribes and kickbacks to Mozambican officials and Credit Suisse bankers to secure the contracts and loans.

Credit Suisse went on to sell parts of those loans to investors, including some in the United States, who were falsely told that all the money was being used for the legitimate government projects, according to prosecutors.

While Privinvest did deliver ships and equipment to Mozambique, prosecutors said, their value was grossly inflated.

Eventually the loans defaulted and investors lost their money.

Boustani, who testified in his own defense at the trial, never disputed that he paid officials but said he had no role in packaging the loans for investors.

His lawyers had argued that the case did not belong in the United States, which Boustani never visited.

Three Credit Suisse bankers previously pleaded guilty in the case. Two of them, Andrew Pearse and Surjan Singh, testified against Boustani at the trial.

Former Mozambique Finance Minister Manuel Chang was also charged in the case. Prosecutors said Chang, who is fighting extradition in South Africa, secretly had the country’s government guarantee the loans in exchange for bribes. Chang denies wrongdoing.

When the loan guarantees became public in 2016, foreign donors to cut off support and Mozambique defaulted on its sovereign debt. It remains among the world’s most indebted countries.