A US court has convicted Mozambique’s former finance minister of a decade-long conspiracy that sparked the country’s worst economic crisis since independence.
Manuel Chan was convicted of taking bribes through US banks to approve secret loans.
The loans were intended to pay for a tuna fishing fleet and other projects, and the affair became known as the “tuna bond” scandal.
However, the loans were looted, leaving Mozambique $2 billion (£1.5 billion) in debt.
Chan was arrested in South Africa in 2018 and extradited to the United States the following year to face fraud and money laundering charges.
Mozambican authorities had wanted to extradite Chan to his home country to stand trial rather than to the United States.
Chan faces up to 20 years in prison at a future date. He denies the charges and his lawyer said he plans to appeal.
Analysts say it is one of the biggest corruption cases ever to take place on the African continent.
Ten people are currently in prison in Mozambique for their involvement in the scandal, including the son of then-president Armando Guebuza.
The loan was issued by Credit Suisse and Russian bank VTB and guaranteed by the Mozambican government.
However, some of these loans have not been made public and were approved during Chang’s term as finance minister from 2005 to 2015.
A New York court heard that Chan received $7 million in bribes from shipbuilding company Privinvest, but his lawyers said there was no evidence Chan had received “a single penny” and that the project had been approved by former President Guebuza and other cabinet ministers.
But in closing arguments on Monday, Assistant U.S. Attorney Jenny Ngai, prosecuting, said Chan “personally signed all of the loan guarantees and he was crucial in getting the loans approved.”
“He cared more about money than status,” she told the court.
Earlier, three former Credit Suisse bankers pleaded guilty to U.S. money laundering charges related to the “tuna bond” scandal, and in late 2021, British authorities fined the investment bank $178 million over the scandal.
The fine was part of a $475 million settlement with regulators in the UK, Switzerland and the US.
The illicit trade has resulted in “millions of people being pushed into poverty” and “billions of dollars in lost economic growth”, Richard Messick, author of the Global Anti-Corruption Blog, told the BBC.
An independent audit ordered by the International Monetary Fund (IMF) found that £500 million of the missing funds had been misappropriated. The fund later withdrew its aid to Mozambique. It remains unclear what became of the money.
Mozambique is rich in natural resources, including vast offshore gas reserves and ruby mines, and although its economy has grown steadily in recent years, it remains one of the poorest countries on the African continent.
“Today’s sentence is an emotional victory for justice and for the Mozambican people who were betrayed by the defendants, corrupt government officials who betrayed Mozambique, one of the poorest countries in the world, through greed and self-interest,” Breon Peace, U.S. Attorney for the Eastern District of New York, said in a statement Thursday.