The US Department of Justice is alleging that more than $200 million in bribes and kickbacks was paid to Mozambican government officials and bankers in a scam involving maritime loans for Mozambique. MLROs should be on the lookout for various names.

The four-count indictment, just unsealed, was returned on 19 December by a grand jury in the Eastern District of New York, charging two executives of a shipbuilding company, three former senior Mozambican government officials and three former London-based investment bankers for their parts in a vast fraud and money laundering scheme that victimised investors from the United States and elsewhere.

The Mozambican PEPs

Among the defendants, Manuel Chang, 63, was a citizen of Mozambique and the country's minister of finance. He has been arrested in South Africa and the US is seeking his extradition. Anthonio do Rosario was a citizen of Mozambique and an official in its government state intelligence and security service, known as the Servico de Informacoes e Seguranca do Estado or SISE. He was therefore a 'foreign official' as described in the US Foreign Corrupt Practices Act 1977. He is not in US custody as yet. Teofilo Nhangumele, 50, a citizen and resident of Mozambique, acted on behalf of the Office of the President of Mozambique. He is not in US custody either.

Chang was charged with one count of conspiracy to commit wire fraud, one of conspiracy to commit securities fraud, and one of conspiracy to commit money laundering. Do Rosario was charged with the same. Nhangumele was charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering in connection with his negotiation and receipt of bribe payments relating to the loans.

Together with other governmental agencies, incidentally, SISE owned three companies called Proindicus (formed to perform coastal surveillance), EMATUM (tuna fishing) and MAM (shipyard construction and maintenance), all of which are classified as "intrumentalities of a foreign government" by the FCPA. Proindicus, EMATUM and MAM borrowed in excess of $2 billion through loans guaranteed by the Mozambican Government, $200 million of which were siphoned off.

US prosecutors refer to the criminal operation as "brazen." There were three fraudulent loans, signed off by Chang.

Also indicted were an unnamed co-conspirator who was involved in obtaining the Mozambican government's approval of a project involving Proindicus, another anonymous individual who was a relative of a senior official of Mozambique and yet another unidentified former senior official in Mozambique's Ministry of Finance who also sat on the board of EMATUM. It is not known whether their identities might come to light eventually.

The names of the bankers

The US Attorney's office is also keeping the names of the investment banks that were instrumental in the fraud a secret. Not so the investment bankers, however.

The three investment bankers - Andrew Pearse, 49, Surjan Singh, 44, and Detelina Subeva, 37, each resident in the United Kingdom - were each charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, and one count of conspiracy to commit money laundering.  Singh signed the agreements on behalf of his investment bank for two of the three loans, for which the bank acted as primary arranger. The three men have been arrested and the US is seeking their extradition.