Lebanese Businessman’s Acquittal in $2 Billion Mozambique Loan Scandal Topples U.S. Attempts to Police Foreign Corruption
In the U.S. v Boustani trial, a case that has gained international attention, a U.S. Federal Jury in Brooklyn, NY, acquitted Lebanese ship salesman Jean Boustani, an employee of Middle East-based shipbuilder Privinvest Group, of conspiracy to commit fraud and money laundering in a case involving the Republic of Mozambique.
Mr. Boustani, a 41-year old salesman employed by the global shipbuilder, was acquitted on all counts of conspiracy to commit wire fraud, securities fraud and money laundering.
Boustani was declared innocent after being held in custody for almost a year based on U.S. allegations that he defrauded investors in a $2 billion loan scandal involving bribes and kickbacks paid to Credit Suisse bankers and Mozambican government officials. The acquittal struck a blow to the U.S. Government’s attempts to police foreign countries.
The trial presented some major challenges for the jurors, who viewed thousands of documents including emails, text messages, Privinvest files, official contracts and financial records involving transactions executed in the Middle East, Europe, and Africa.
Three of the jurors serving on the trial, including the foreman, declared in post-trial interviews that they didn’t understand how U.S. federal prosecutors in the Eastern District of New York had the authority to try a case where events took place outside of their jurisdiction.
The U.S. accused Boustani of participating in a bribery and kickback scheme to make illicit payments to Credit Suisse bankers and Mozambique government officials when the Swiss bank, along with Russian bank VTB, issued $2 billion in loans to fund a contract with Privinvest for three maritime projects in Mozambique.
The widely commented loan scandal revolved around three Mozambican state-owned companies that had secured loans from two European banks to purchase a fleet of tuna trawlers, created a coastal surveillance system, and develop a shipyard in Mozambique. After failing to follow through on the projects, the government defaulted on its Euro-bonds in 2017.
Boustani pleaded not guilty and Privinvest, which is not charged with any crime, denied any wrongdoing.
The three former Credit Suisse bankers pleaded guilty and agreed to cooperate with U.S. prosecutors, although their testimony only weakened the prosecution’s argument because their testimonies did not implicate direct involvement by Boustani or Privinvest.
During the six-week long trial, a parade of foreign officials appeared on the witness stand to discuss transactions negotiated in various foreign countries. The U.S. prosecutors’ arguments failed to hold water, in particular when the defense attorneys demonstrated that Boustani couldn’t have possibly foreseen that monies paid via a Middle Eastern bank could also pass through banks in the U.S. The U.S. presented evidence that included hundreds of emails detailing payments made by Boustani, which he explained over three days on the witness stand were fees paid to help executive legitimate business transactions on behalf of Privinvest.
One juror, when questioned on whether she believed the prosecution’s argument that Boustani was in fact bribing Mozambican officials, replied that she believed the payments were seemingly genuine attempts to secure business for Boustani’s employer.
Witnesses for the prosecution also failed to uphold the assertion that the prices of the boats and equipment were inflated, testifying instead that the prices listed in the documents appeared to be consistent with the market value of the boats and equipment in question.
At the announcement of the verdict that freed him after spending nearly a year behind bars, Boustani smiled and hugged each of his lawyers after making the sign of the cross in the Brookly, NY, courtroom. Addressing U.S. District Judge William Kuntz, he stated, “Your honor, first of all, I apologize for being emotional, a little bit. It wasn’t easy for me after 11 months in jail.” He then proceeded to thank the court “for all your time, dedication, and for your fair judgment throughout this trial.” As he exited the courtroom, Boustani raised his fist in the air in a triumphant gesture of victory.
Michael Schachter, defense attorney for Mr. Boustani, maintained in his opening statement that the U.S. “is not the world’s policeman,” underscoring the question of whether this trial actually belonged in the U.S. Following the verdict delivered on Monday, he thanked the court and remarked, “We are gratified and relieved and deeply appreciative of the jury’s verdict.”
Source: Bloomberg – Salesman Cleared in $2 Billion African Scam in Blow to U.S.