In October 2021, Credit Suisse was fined nearly $500 million by global financial regulators, after pleading guilty to wire fraud in what has been termed the “tuna bonds” loan scandal.
Leverets continues to represent Andrew Pearse, Detelina Subeva, and Surjan Singh – three Credit Suisse bankers accused of receiving over $50m of kickbacks in respect of the transaction of loans made by Credit Suisse and VTB Capital which were guaranteed by the Republic of Mozambique.
Background
Between 2012 and 2016, Credit Suisse and Russian bank VTB arranged $1.3bn (£940m) worth of loans to the Republic of Mozambique (the Republic) for government sponsored investment schemes, including various maritime security projects and a state tuna fishery. The borrowing was guaranteed by the Republic pursuant to sovereign guarantees. The guarantees all were governed by English law, with a jurisdiction clause in favour of the courts of England and Wales.
However, it was claimed that the Lebanese shipbuilders arranged “significant kickbacks” worth $137m, including $50m for Andrew Pearse, Detelina Subeva, and Surjan Singh, in order to secure more favourable deals on the loans. After the scandal was publicised, donors such as the World Bank and IMF cut aid to the Republic, allegedly resulting in the collapse of its economy.
Timeline of events
The original action was brought by the Republic on 27th February 2017. The proceedings in London alleged bribery, conspiracy to injure by unlawful means, dishonest assistance, knowing receipt and proprietary claims. The case resulted in a series of proceedings in London, New York, Beirut, Maputo, Geneva, and Johannesburg.
In May 2019, Detelina Subeva, a former vice president of Credit Suisse Securities (Europe) Ltd (CSSEL), pled guilty to conspiracy to commit money laundering.
In July 2019, Andrew Pearse, a former managing director of CSSEL pled guilty to conspiracy to commit wire fraud.
In September 2019, Surjan Singh, a former managing director of CSSEL, pled guilty to conspiracy to commit money laundering.
In October 2021, Credit Suisse Group AG and CSSEL admitted regulatory failings in the US, England, and Switzerland in the financing of an $850 million loan and agreed to pay $475 million in penalties and fines as part of coordinated resolutions with criminal and civil authorities in the US and UK, as well as restitution to victims of “the scandal”.
Credit Suisse Group AG entered into a three-year deferred prosecution with the US Securities and Exchange Commission and the FCA in connection with the criminal charge of conspiracy to commit wire fraud, and CSSEL pled guilty to one count of conspiracy to commit wire fraud.
In July 2022, in a deal signed off by the Eastern District Court in New York, Credit Suisse agreed to pay $22.6 million in restitution to investors.
On 7th December 2022 a Mozambican court found the former president’s son and 10 other people, including state security officials, guilty of charges including money laundering and bribery in relation to the tuna bonds scandal. Each was sentenced to more than 10 years in prison.
What next?
The civil proceedings in England are due to come on for trial in October 2023, and are expected to last 3 months, so watch this space for updates.
