US jury convicts former Mozambican finance minister Manuel Chang of corruption related to ‘tuna bonds’

NEW YORK – Former Mozambican Finance Minister Manuel Chang was convicted on Thursday in a financial conspiracy case that grew out of the “tuna bond” scandal in his country and was brought to court in the United States.

A federal court in New York has issued the verdict.

Chang was accused of accepting bribes so his African country could secretly incur large loans to government-controlled companies for tuna fishing vessels and other offshore projects. The loans were plundered through bribes and kickbacks, prosecutors said, and Mozambique ended up with $2 billion in “hidden debt,” triggering a financial crisis.

“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by this defendant, a corrupt high-ranking government official whose greed and business interests led to the sale of one of the world’s poorest countries,” Brooklyn U.S. Attorney Breon Peace said in a statement.

Messages seeking comment were left with Chang’s lawyers and the Mozambican embassy in Washington. Chang was his country’s top financial official from 2005 to 2015.

Chang has pleaded not guilty to U.S. conspiracy charges. His lawyers have said he was doing what his government wanted when he signed promises that Mozambique would repay the loans, and that there was no evidence of a financial quid-pro-quo for him.

No sentencing date has been set for Chang, 48. The charges could carry a maximum sentence of 20 years in prison, though sentencing guidelines in a specific case can vary based on the defendant’s history and other factors.

Between 2013 and 2016, three Mozambican government-controlled companies quietly borrowed $2 billion from large foreign banks. Chang signed guarantees that the government would repay the loans—key assurances to lenders who otherwise likely would have steered clear of the brand-new companies.

The proceeds were to be used to fund a tuna fishing fleet, a shipyard, coast guard vessels and radar systems to protect natural gas fields off the Indian Ocean.

But bankers and government officials stole the loan money to line their own pockets, U.S. prosecutors say.

“The evidence in this case shows that we are dealing with an international fraud, money laundering and bribery scheme on a massive scale,” and Chang “chose to participate in it,” Assistant U.S. Attorney Genny Ngai told jurors in closing arguments Monday.

Prosecutors accused Chang of accepting $7 million in bribes that were transferred through U.S. banks to European accounts belonging to his associate.

Chang’s defense argued there was no proof he was actually promised or received a single cent.

The only agreement Chang entered into “was to lawfully borrow money from banks to enable his country to engage in public infrastructure work,” defense attorney Adam Ford said in his closing argument Monday.

The companies defaulted on the loans, leaving Mozambique with $2 billion in debt, about 12% of its gross domestic product at the time. The country, which the World Bank had ranked as one of the world’s 10 fastest-growing economies for two decades, suddenly found itself in financial crisis.

Economic growth has stagnated, inflation has soared, the currency has depreciated, international investment and aid have plummeted and the government has cut services. Nearly 2 million Mozambicans have been forced into poverty, according to a 2021 report by the Chr. Michelsen Institute, a Norwegian development research institute.

The loans were sold to investors, including through “tuna bonds,” some of which involved money for pension and retirement funds, prosecutors said.

Investors in the U.S. and elsewhere suffered “significant losses,” Nicole M. Argentieri, the assistant attorney general who heads the Justice Department’s Criminal Division, said in a statement after the verdict.

The Mozambican government has reached out-of-court agreements with creditors to repay part of the debt. At least 10 people have been convicted by Mozambican courts and sentenced to prison over the scandal, including Ndambi Guebuza, the son of former Mozambican President Armando Guebuza.

Chang was arrested at Johannesburg’s main international airport in late 2018, shortly before a U.S. indictment against him and several others was made public. After years of fighting extradition from South Africa, Chang was repatriated to the U.S. last year.

Two British bankers have pleaded guilty in the U.S. case, but a jury in 2019 acquitted another defendant, a Lebanese shipyard executive. Three other defendants, one Lebanese and two Mozambicans, are not in U.S. custody.

In 2021, the banking giant then known as Credit Suisse agreed to pay at least $475 million to British and American authorities for its role in the Mozambique loans. The bank has since been taken over by former rival UBS.