US authorities have arrested three former Credit Suisse (CS) bankers over their alleged involvement in a $2bn (£1.6bn) fraud in Mozambique.
Andrew Pearse, Surjan Singh, and Detelina Subeva were arrested in London on Thursday (4 January) and released on bail as the US pursues their extradition.
The fraud is related to loans to companies owned by the Mozambique state. The men were indicted by a New York US District court.
The country’s former finance minister Manuel Chang was arrested in South Africa as part of the same case.
The indictment alleges that between 2013 and 2016, more than $2bn of loans were issued and guaranteed by the Mozambique government, with the intent to defraud investors.
With the borrowed money, maritime projects such as a state tuna fishery were used as fronts as the conspirators “intentionally diverted portions of the loan proceeds to pay at least $200m in bribes and kickbacks to themselves, Mozambican government officials and others,” according to the indictment.
The indictment claims that the loans were also in part hidden from the International Monetary Fund (IMF), and caused a financial crisis when the government defaulted on the loans. The IMF cut off financial support to the government when the loans were discovered in 2016, hampering the growth of the economy in Mozambique.
Credit Suisse released a statement distancing themselves from the former employees named in the indictment. The bank said the trio had been “circumventing our internal controls” over the actions detailed in the case.
The statement continued: “No action has been taken against Credit Suisse. The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank.”