By Gil Kapen
The fraud and money-laundering trial of Jean Boustani, a Lebanese boat salesman, grinds to its conclusion in a federal court in Brooklyn, New York. But the magnitude of Boustani’s alleged misdeeds have not quite lived up to the government’s advertisement. He is no criminal “mastermind” to paraphrase the prosecution.
The prosecutors’ narrative has repeatedly shifted over time, in part because Boustani’s employer, Privinvest, a leading global shipbuilder, delivered what it was contractually obligated to deliver – ships, equipment and systems to the government of Mozambique – and in part because Boustani’s nexus to the U.S. is tangential at best. Whatever he did occurred overseas.
When taken together, Boustani’s sudden preeminence (at least according to the conspiracy and fraud charges against him) reads like an afterthought. Last winter, the prosecution painted the picture of a conspiracy in which multiple defendants “orchestrated an immense fraud and bribery scheme that took advantage of the U.S. financial system” for the sake of lining “their own pockets with hundreds of millions of dollars.”
Although Boustani was named in the indictment, he was only one person among a cast of characters. Other defendants included allegedly corrupt Mozambican government officials, who took top billing, and European bankers.
The prosecution’s press release blared: “Mozambique’s Former Finance Minister Indicted Alongside Other Former Mozambican Officials, Business Executives, and Investment Bankers in Alleged $2 Billion Fraud and Money Laundering Scheme that Victimized U.S. Investors”.
Similarly, despite the fact that one count of the indictment was devoted to alleged violations of the Foreign Corrupt Practices Act and bribery, Boustani was not charged on that count. Indeed, the press release made no mention of him on that score.
Instead, three former Credit Suisse bankers were listed in the context of FCPA violations: Andrew Pearse, a New Zealand native, Surjan Singh of the U.K., who was both Pearse’s friend and a subordinate at Credit Suisse, and Detelina Subeva, originally of Bulgaria. Despite being married, both Pearse and Subeva became romantically involved, becoming entwined in each other’s dreams and schemes, according to Pearse’s testimony.
But in the months since the initial indictment, the Mozambican officials remained overseas and the troika of ex-Credit Suisse bankers each entered a single-count guilty plea despite being charged with multiple federal crimes.
Suddenly the scope of their conspiracy didn’t seem so large and the magnitude of their crimes didn’t appear so grave. Effectively, they had been absolved of much of their purported wrongdoing. That fact has had the effect of rolling back the seriousness and extent of the conspiracy accusations against Boustani as well.
Still, when the trial finally started in October, Boustani was branded by prosecutors as the alleged scheme’s “mastermind”, a description that appeared in neither the government’s press release nor in its initial December 2018 indictment. The fact that the roster of other defendants included senior members of the Mozambique government and a group of high-powered, highly sophisticated and educated bankers had become secondary.
As the trial has made plain, the loans in question were between Credit Suisse, VTB Bank and Mozambican entities. Boustani did not draft the loan documents and loan proceeds went for the purchase of vessels and systems built by Privinvest, which were, in fact, delivered. Efforts by the government to demonstrate that the cost valuations affixed to the vessels were inflated met with less than success. The appraisers that the government put on the stand appeared less than ready to complete their task.
By the same measure, both Pearse and Singh admitted at trial to taking millions in kickbacks and running roughshod over Credit Suisse’s internal regulations and controls. That raised the prospect that if anyone was defrauded it was Credit Suisse, not U.S. investors who were at great distance from the initial loan transactions.
On top of that, in court filings the government acknowledged that statements made by Pearse and Singh were either inconsistent or capable of being viewed that way as the result of their contradictory statements and memory lapses. Seeking to stanch the bleeding, the government sought to bar additional evidence being introduced to further undercut their witnesses’ credibility. Although the court sided with the prosecution, the jury had the opportunity to see the witnesses struggle under cross-examination. Pearse’s and Singh’s credibility was damaged.
In contrast to the compelling and confusing testimony of the government’s star witnesses, the man facing the jury is now testifying freely, clearly and of his own volition.
Gil Kapen is a Special Advisor at the American Jewish International Relations Institute and a former staffer on the House Subcommittee on Africa.