Mozambique: 'Hidden Debts' Suspect Was Talking to FBI

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Maputo — One of the key suspects in the case of Mozambique's "hidden debts" has been cooperating with the United States Federal Bureau of Investigation (FBI) since January.

The term "hidden debts" refers to the fraudulent scheme whereby three security-linked companies, Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management) were set up, which then borrowed over two billion US dollars from the banks Credit Suisse and VTB of Russia in 2013-2014. Key to the fraud were illicit government loan guarantees mostly signed by the then finance minister, Manuel Chang.

Teofilo Nhangumele was one of the well-connected fixers who worked to ensure that the scheme went ahead. There are a string of highly incriminating e-mail messages between Nhangumele and Jean Boustani, a key salesman for the Abu Dhabi based group Privinvest which became the sole contractor for the three fake companies.

Boustani has been under arrest in a New York jail since January, charged with conspiracy to commit money laundering, wire fraud and securities fraud. Nhangumele is one of the Mozambicans named as a co-conspirator in the US indictment.

He was detained by the Mozambican Attorney-General's Office (PGR) in mid-February. The PGR also ordered the seizure of some of his property, believed to have been acquired with the proceeds of the corrupt scheme.

Prior to his arrest, he was plea bargaining with the FBI - we know this, because it is mentioned in an affidavit from Boustani's lawyers, Wilkie Farr and Gallagher LLP, submitted to the New York court last Friday, seeking to exclude evidence from Nhangumele in the case against their client.

According to the affidavit, Nhangumele was interrogated in Maputo on 29 January, by two officials of the US embassy, Fanell A. Binder (FBI Assistant Legal Attache) and Matthew Musselwhite (Deputy Country Attache of the DEA, Drug Enforcement Administration).

Further interviews took place on 4 and 5 February. There seem to have been no further contacts between the FBI and Nhangumele after his arrest on 13 February.

Boustani's lawyers say the defence was not informed of claims made by Nhangumele during these interviews - particularly his repeated statement that he was not an official of the Mozambican government during the relevant period when the Proindicus, Ematum and MAM scheme was being cooked up.

There is no doubt that he previously worked for the government: he was chief financial officer for the Ministry of Youth and Sports from 2009 to 2011. Boustani claims the relevant period begins in 2013.

Certainly the illicit loan guarantees were signed in 2013 and 2014, but there is some evidence that negotiations began in 2011.

Boustani's lawyers argue that Nhangumele "is a political relations consultant", and it was in this capacity that Boustani engaged him "as a consultant familiar with the local political dynamic".

In his FBI interviews, the affidavit claims. Nhangumele repeatedly said he had nothing to do with the Mozambican government and "he was instead serving as a facilitator between Mr Boustani and the government of Mozambique".

The lawyers claim that the FBI suppressed evidence favourable to Boustani. The statements made by Nhangumele in his FBI interviews were only disclosed to Boustani's lawyers this month, and they say that, if they had been aware of them earlier, "we could have reached out to Mr Nhangumele and investigated. Now, with trial quickly approaching and Mr Nhangumele in a jail cell a continent away, such an investigation is an impossibility".

"The tardy disclosure of Mr Nhangumele's exculpatory statements has therefore prejudiced Mr Boustani", the affidavit argues, and so the communications from Nhangumele should be excluded from Boustani's trial.

Nhangumele also provided "an alternative explanation" for an e-mail in which Boustani and Nhangumele agreed to payments of 50 million dollars in bribes. This "alternative" is that the money was for a "confidential operation" by the Mozambican Security and Intelligence Service (SISE).

So far we have no details of this, since the relevant paragraphs of the affidavit have been blacked out.

SISE was the main player in setting up Proindicus, Ematum and MAM, and a senior SISE official, Antonio do Rosario, became the chairperson of all three companies.

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