An important milestone is the decision by a U.S. federal court that Manuel Chang, the former Mozambique finance minister, must stay in detention while he awaits prosecution for his participation in the notorious “tuna bond” fraud. Mozambique’s bankruptcy was a consequence of this fraud, which also cost Credit Suisse almost $500 million in criminal and civil fines.
After spending almost five years in a South African jail while awaiting extradition, Chang, who had the appearance of being weak, had hoped to get bail. Judge Nicholas Garaufis, however, rejected the bail application due to the defendant’s flight risk. Chang’s attorney, Adam Ford, agreed that it was likely that Chang would seek asylum at the Mozambique Mission to the UN in Manhattan if the court had brought up the prospect. Ford suggested that Chang stay in Brooklyn and wear a GPS ankle bracelet to prevent him from traveling to the Mozambique Mission. Chang would also give up his passport and post a $1 million personal recognizance bond that was backed by $100,000 in cash.
Hiral Mehta, the prosecutor, argued against providing bail by pointing out that Chang had no connections to the United States, might be sentenced to up to 55 years in prison if found guilty, and had reportedly taken $5 million in bribes, which indicated financial means. The $2 million that Chang had in Mozambique, according to Chang’s defense team, was frozen and unreachable. Ford gave the court his word that his client lacked access to the assets. Judge Garaufis, however, remained unpersuaded and rejected the bail request.
Chang is one of eight people accused of participating in a scheme to steal hundreds of millions of dollars from loans procured for questionable maritime projects, including a fleet of tuna fishing vessels, totaling $2 billion. Chang allegedly got $5 million in bribes from the prosecution in return for obtaining a government guarantee on the loans, which was made possible by Credit Suisse. When the loans fell behind on their payments, Mozambique’s national debt collapsed, severely harming the nation’s economy.
Chang has entered a not guilty plea to accusations of conspiring to commit money laundering, securities fraud, and wire fraud. Although his signature is on the loan paperwork, his defense team said that this does not prove he was aware of the deception. They clarified that Chang signed the papers as part of his official duties.
Three Credit Suisse bankers previously entered guilty pleas in the matter, but a tuna boat executive was exonerated in 2019. The other three defendants are not in custody at this time.
Chang used a Portuguese interpreter for the arraignment. He replied in Portuguese when asked whether he knew English, saying, “I don’t speak, but I understand.” Given the importance of the proceedings and the fact that Chang has a master’s degree from the University of London, Judge Garaufis allowed the request for an interpreter.
As the case moves toward trial, the decision to deny bail to Manuel Chang represents an important turning point in the legal processes surrounding the “tuna bond” controversy in Mozambique.