Mozambique minister convicted in $2B fraud scheme

August 10, 2024 Robert Abruzzese, Courthouse Editor

Brooklyn federal court, where former Mozambican Finance Minister Manuel Chang was convicted for his role in a $2 billion fraud and money laundering scheme. The case, involving significant financial losses for global investors, was presided over by U.S. District Judge Nicholas Garaufis. Eagle photo by Rob Abruzzese

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Former Mozambican Finance Minister Manuel Chang was convicted in Brooklyn federal court for his role in a massive $2 billion fraud and money laundering scheme that left investors across the globe, including in the United States, with significant losses.

The 48-year-old now faces up to 20 years in prison following his conviction for conspiracy to commit wire fraud and conspiracy to commit money laundering.

Chang was extradited to the United States from South Africa in July 2023 after being arrested in December 2018. The trial, which lasted four weeks, culminated in a guilty verdict delivered by a federal jury in front of the U.S. District Judge Nicholas Garaufis.

“Today’s verdict is an inspiring victory for justice and the people of Mozambique who were betrayed by the defendant, a corrupt, high-ranking government official whose greed and self-interest sold out one of the poorest countries in the world,” said U.S. Attorney Breon Peace. “Chang now stands convicted of pocketing millions in bribes to approve projects that ultimately failed, laundering the money, and leaving investors and Mozambique stuck with the bill.”

Chang’s conviction stems from his involvement in a conspiracy where he accepted $7 million in bribes while serving as Mozambique’s finance minister. The bribes were in exchange for signing guarantees on loans totaling over $2 billion, which were supposed to fund three maritime projects in Mozambique: coastal surveillance, tuna fishing, and shipyard construction. Instead, the funds were diverted for personal gain, with more than $200 million used for bribes and kickbacks, leaving Mozambique and investors to foot the bill when the projects collapsed.

The case was tried in Brooklyn’s Eastern District of New York due to the involvement of U.S. financial institutions and investors who were defrauded as part of the scheme. The fraudulent loans were marketed and sold to investors in the United States, directly linking the criminal conduct to the jurisdiction.

The fraudulent activities, orchestrated by Chang and his co-conspirators, caused substantial losses when the involved companies — Proindicus, EMATUM and MAM — defaulted on their loans, leading to missed payments exceeding $700 million. These companies were controlled by the Mozambican government but were implicated in the scheme that defrauded international investors.

Sentencing for Chang is scheduled, and he faces a potential two decades behind bars.