Mozambique ex-finance minister denied bail in New York over $2 billion ‘tuna bond’ scandal

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Mozambique’s former finance minister, Manuel Chang (pictured here in 2019), has been deemed a flight risk.

Wikus De Wet | Afp | Getty Images

A U.S. federal judge ruled that Mozambique’s former finance minister, Manuel Chang, must remain behind bars while awaiting trial for fraud in the notorious “tuna bond” scandal which helped bankrupt the African nation and lead Credit Suisse to pay about half a billion dollars in criminal and civil penalties.

Chang, who looked frail walking into court Thursday afternoon in Brooklyn, hoped to be out on bail after being imprisoned for nearly five years in South Africa while awaiting extradition.

Judge Nicholas Garaufis denied the defendant’s request for bail, deeming Chang a flight risk. “He could still present himself to the Mozambique Mission to the UN on 55th Street in Manhattan and they could choose to harbor him and return him to Mozambique if they chose, right?” the judge asked Chang’s lawyer, Adam Ford.

Ford answered “yes,” but proposed Chang wear a “GPS ankle bracelet” and agree to remain in Brooklyn, thus preventing him from entering the Mozambique Mission in Manhattan. In addition, his client would post a $1 million personal recognizance bond, secured by $100,000 cash, and surrender his passport.

Prosecutor Hiral Mehta argued Chang was a flight risk because he has no ties to the United States, faces as many as 55 years in prison if convicted, and is financially well off after allegedly receiving $5 million in bribes. Chang’s lawyers disputed that, saying that although Chang does have $2 million in Mozambique, those funds are frozen. “He has no access to that money,” Ford told the judge. Garaufis remained unconvinced and ruled “the application for bail is denied.”

Mozambique’s former finance minister, Manuel Chang (center), was in court Thursday afternoon in Brooklyn with his interpreter (far left) and his lawyer Adam Ford (far right).

CNBC’s Elizabeth Williams

Chang is one of eight people charged in an alleged conspiracy to loot hundreds of millions of dollars from $2 billion worth of loans arranged for dubious maritime projects, including a fleet of tuna fishing boats.

Prosecutors say Chang received three payments totaling $5 million in exchange for providing a government guarantee from Mozambique on the loans, arranged by Credit Suisse. When the loans defaulted, it led to the country’s sovereign debt collapse, devastating the Mozambique economy.  

Chang pleaded not guilty to three charges of conspiracy related to wire fraud, securities fraud, and money laundering. Hinting at his future defense, Chang’s lawyer stated that although his client’s signature is on the loan documents, it doesn’t indicate he knew about the fraud.

“He was required to sign a document because that was his role in the government,” said Ford.

Three Credit Suisse bankers previously pleaded guilty in the case.  A tuna boat executive was acquitted in 2019. The three remaining accused are not in custody.

Chang used a Portuguese interpreter throughout the arraignment. When asked by the judge if he spoke English, Chang responded in Portuguese “I don’t speak, but I understand.” 

Judge Garaufis responded “I’m asking because I understand you have a master’s degree from the University of London.” Chang’s lawyer stated that given the significance of the proceedings, it would be helpful for his client to have an interpreter. The judge agreed to the request.

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