How A ‘Tuna Affair’ Sent Ex-Mozambique Finance Minister To Prison

A former finance minister of Mozambique, Manuel Chang, has been sentenced to eight and a half years in prison after being found guilty of facilitating a multimillion-dollar fraud scheme involving $2 billion in loans secured by the government without authorization. These loans, intended for maritime security and tuna fishing projects, nearly brought the country’s economy to the brink of collapse.

What Was the Scandal?

Between 2013 and 2016, Mozambique raised $2 billion in loans through international investors, facilitated by two American banks Credit Suisse and VTB Capital. The loans were marketed as funding for ambitious maritime projects, including the development of shipyards and a tuna fishing fleet intended to bolster Mozambique’s economy. However, much of the funding was misappropriated. About $200 million was funneled into bribes and kickbacks for officials and bankers, with Manuel Chang personally pocketing $7 million. These funds were hidden through complex international financial transactions, with Privinvest Group, a UAE-based shipbuilding company, playing a central role in the fraudulent activities.

Chang bypassed Mozambique’s Parliament to guarantee the loans, committing the government to debts without oversight or approval. The “hidden debt” came to light in 2016 when Mozambique defaulted on its sovereign debt, throwing the country into economic unrest. Nearly 2 million Mozambicans were pushed into poverty, according to some estimates. The government drastically cut public services, economic growth stalled, inflation soared, the currency depreciated sharply, and international investment and aid dwindled. Upon investigations, prosecutors found evidence that Chang and his co-conspirators had misrepresented the purpose of the loans to investors, redirected large sums to bribes and personal enrichment, and concealed the scale of borrowing from the public and government institutions.

Manuel Chang was arrested in South Africa in 2018 and extradited to the United States in 2023, where he faced charges of conspiracy to commit wire fraud and money laundering. 

What’s The Fallout?

The sentencing was handed down after a four-week trial that ended in August in which Judge Nicholas G. Garaufis of the U.S. District Court in Brooklyn determined that the former minister, Manuel Chang, 69, had conspired to commit wire fraud and money laundering through an international scheme that bilked several international investors out of about $2 billion, according to a news release from the U.S. attorney’s office in the Eastern District of New York. He has been ordered to spend eight and a half years in prison and pay $7 million in forfeiture, prosecutors said.

Chang, who resisted extradition for years before being brought to the U.S. in 2023, could have faced a longer sentence of up to 20 years in prison. His lawyers, however, argued for no additional prison time, arguing that his involvement in the loan scheme was relatively minor. They claimed Chang did not personally benefit from the illicit funds, which were eventually returned to the Mozambican government. “He’s been punished enough,” said defense attorney Adam Ford. Prosecutors rejected this argument, seeking a sentence of 11 to 14 years. They contended that Chang enjoyed lavish trips to villas in France and lived in luxury, despite the widespread poverty in Mozambique. “He stole from his country and caused the crisis that crippled it,” said Assistant U.S. Attorney Jonathan Siegel.

Judge Nicholas Garaufis sided with prosecutors, emphasizing that Chang played a “central role” in the corruption, having signed the financial documents that plunged Mozambique into economic turmoil.

In addition to his time behind bars, Mr. Chang will have to pay restitution to his victims, the release said. How much he has to pay will be determined at a later date.

Credit Suisse and its subsidiary, based in Britain, admitted to defrauding many U.S. and international investors in the financing of an $850 million loan in October 2021. The subsidiary also pleaded guilty to conspiring to commit wire fraud while Credit Suisse worked out a deferred prosecution agreement, according to the release. The pair have had to pay $475 million in fines for aiding the fraud.