Switzerland has fined Lara Warner, Credit Suisse’s former head of risk and compliance, CHF100,000 ($114,000) for not reporting money laundering suspicions connected to Mozambique’s $1.5 billion “tuna bond” scandal.
The penal order from the Swiss Federal Department of Finance, seen by Keystone-SDA, says Warner knew of the suspicious facts yet made no effort to file a report with Switzerland’s Money Laundering Reporting Office.
The scandal’s skeleton: between them, Credit Suisse and Russia’s VTB Bank lent around $2 billion to Mozambican state companies from 2013, supposedly for a tuna fleet, shipyards and anti-piracy patrol craft. Hundreds of millions were diverted instead, much of the debt was hidden from bondholders, and the discovery helped trigger a currency collapse and sovereign default.
Credit Suisse’s bill for it already runs to nearly half a billion dollars. In 2021 it agreed a $475m settlement: a $247.5m US Justice Department criminal fine, trimmed to $175.5m after payments to other regulators, $100m to the Securities and Exchange Commission and another $200.6m for the UK’s Financial Conduct Authority, on top of writing off $200m of Mozambican debt. The bank pleaded guilty to a conspiracy to commit wire fraud. “Credit Suisse, through its subsidiary in the United Kingdom, engaged in a global criminal conspiracy to defraud investors,” US Attorney Breon Peace said.
UBS, which absorbed Credit Suisse, later settled Mozambique’s London civil suit, where the judge ruled the country was defrauded. But more than $1.1bn of debt tied to the deals remains disputed.
Regulators are still working through the people. Britain’s FCA banned Andrew Pearse, who admitted wire fraud, money laundering and taking kickbacks worth over $45 million, and Surjan Singh, who admitted money laundering and taking $5.7 million in unlawful payments. “There is no place in our markets for those who engage in bribery and corruption,” said FCA enforcement director Steve Smart.
Pearse faces up to 151 months in a US prison, with prosecutors recommending less for his “exceptional” cooperation. His sentencing was set for March 6. Manuel Chang, Mozambique’s former finance minister, got eight-and-a-half years from a US judge in January.
The original 2013 deal raised $500m for the state tuna-fishing company EMATUM at a handsome 8.5% yield, with the issue oversubscribed and VTB adding $350m. Investors were told Mozambique could be a booming tuna hub catching 200,000 tonnes a year; the national fisheries office put the 2013 catch at 6,000 tonnes. Much of the money went instead to France’s CMN shipyard for about $220m in boats, including three Ocean Eagle 43 trimarans built to launch drones and carry cannon.
Sources
- Former head of risk and compliance fined CHF100K over Mozambique's $1.5 billion "Tuna Bond" scandal. | Comsure, Jersey
- Credit Suisse fined $475m over 'tuna bonds' scandal – African Business
