NEW YORK — The former finance minister of Mozambique has received an additional two-and-a-half-year prison sentence from a U.S. court due to his involvement in a financial scandal known as the “tuna bond” issue, which has significantly impacted the economy of Mozambique. Manuel Chang, aged 69, was found guilty last year for accepting bribes that ultimately placed his country in debt for nearly $2 billion in loans from significant international banks.
A federal judge in New York announced the sentence on Friday, which totals eight-and-a-half years, taking into account the almost six years Chang has already spent in prison across the U.S. and South Africa. He was apprehended in 2018 while in South Africa. During the court proceedings, Chang conveyed his remorse through an interpreter, expressing that he has come to understand the wrongness of his actions and admitted to being “very disgusted” with his past decisions.
“I deeply regret the damage I have caused. I am sorry,” he said. Chang appealed to the judge for leniency, mentioning the harsh conditions he faced in South Africa, which he claimed worsened his diabetes and other health issues. “I would not like to die here in a prison in a foreign country, far away from my family,” he stated.
Chang served as Mozambique’s finance minister from 2005 to 2015, a period during which he authorized loans that were intended to fund various projects, such as a tuna fishing fleet, a shipyard, and Coast Guard vessels for the nation. Unfortunately, prosecutors allege that the funds were primarily misappropriated through kickbacks and bribes. They noted that Chang personally received $7 million in bribes, which were funneled through U.S. banks to European accounts. Overall, more than $200 million was diverted, leading to significant financial losses for U.S. and international investors due to misrepresentation regarding the loan usage.
Chang’s legal team contended that there was a lack of proof demonstrating any direct financial exchange, arguing that he merely acted on behalf of his government when he agreed to the repayment terms for loans issued to three state-controlled companies between 2013 and 2016. However, the situation escalated when these companies defaulted, leaving Mozambique with an imposing debt amounting to $2 billion, or about 12% of the nation’s gross domestic product at that time.
The revelation of this “hidden debt” in 2016 triggered severe financial instability for the country, pushing nearly 2 million citizens into poverty. Essential government services were cut, economic growth stagnated, inflation soared, and both domestic and international investment dwindled. Chang had spent years contesting his extradition until he was finally brought to the U.S. in 2023. He faced a potential maximum sentence of 20 years but ultimately received a lesser sentence.
Chang’s defense team argued for no additional prison term, asserting that he played a comparatively minor role in the overall scheme. They maintained that he never benefited financially from the misappropriation since the stolen funds were eventually returned to the Mozambican government. “He’s been punished enough,” stated defense attorney Adam Ford.
In contrast, the prosecution sought a sentence of 11 to 14 years, emphasizing the luxury lifestyle Chang maintained amidst his nation’s struggles. “He stole from his country and caused the crisis that crippled it,” argued U.S. Assistant Attorney Jonathan Siegel. When imposing the sentence, Judge Nicholas Garaufis agreed, citing that Chang held a crucial position in the misconduct, having signed financial documents that bound his government. He highlighted Chang’s fiduciary responsibility to ensure that the loans benefited his country.
The judge also ordered Chang to forfeit $7 million, overruling his defense team’s objections. Consideration of Chang’s age, health, and time already served was made, and the judge expressed a hope that Chang would eventually reunite with his family after completing his term. Following the hearing, Chang’s attorneys indicated their plans to appeal but refrained from offering further comments.
The ruling underlines the message that foreign officials who misuse their authority to commit crimes affecting the U.S. financial system will face justice in the U.S., as stated by Carolyn Pokorny, acting U.S. Attorney for the Eastern District of New York.
Meanwhile, Mozambique is still working to recover from the devastating effects of the scandal. Once considered one of the fastest-growing economies globally, the country is negotiating with creditors to reduce its debt burden. At least ten individuals have been convicted in relation to the scandal within Mozambique, including the former president’s son, Armando Guebuza, and two British bankers have admitted guilt in connection with the U.S. case. Credit Suisse has also settled with U.S. and British authorities for at least $475 million due to its involvement in facilitating the loans.
In a recent address, new Mozambican President Daniel Chapo acknowledged the challenges the nation faces after contentious elections and violence. He expressed a commitment to combat corruption and called for decisive action moving forward. “Mozambique cannot continue to be held hostage by corruption, inertia, cronyism, nepotism, sycophancy, incompetence, and injustice. That’s why we said let’s get to work,” Chapo affirmed.
