Ex-Credit Suisse Banker in Tuna Bond Scandal Avoids Prison

(Bloomberg) — A former Credit Suisse Group banker who pleaded guilty to engaging in a $2 billion fraud and money-laundering scheme in Mozambique avoided a prison term after serving as the government’s star witness at two US trials.

Andrew Pearse was sentenced on Thursday in federal court in Brooklyn, New York, over what became known as the tuna bond scandal for its dubious maritime projects including a fishing fleet. He was sentenced to time served, referring to the brief period when he was in the government’s custody.

“I hope one day I will be remembered not as the poster child for greedy and immoral bankers but for telling the truth, and hope that one day I can make my children proud of me again,” Pearse told US District Judge Nicholas Garaufis just before he was sentenced.

Pearse, once compared to the James Bond villain Goldfinger by another federal judge, had faced a maximum prison term of more than 12 years for his role in the fraud. He pleaded guilty in 2019 to taking $63.7 million in kickbacks tied to three loans for Mozambique. Hundreds of millions of dollars were looted from the African nation, helping to tip it into an economic crisis.

Federal prosecutors said Pearse deserved leniency because his cooperation helped win the conviction last year of Manuel Chang, Mozambique’s former finance minister, as well as the 2021 guilty plea of a Credit Suisse unit. Credit Suisse got a three-year deferred-prosecution agreement with the US Justice Department and was ordered to pay more than $500 million in global fines and other penalties, according to prosecutors.

Prosecutor Jonathan Siegel said in court on Thursday that Pearse’s decision not to fight extradition to the US from the UK was critical, noting that Chang had battled extradition while another defendant continues to do so in Lebanon. 

In providing prosecutors with a wealth of key documents to help them build their case, Pearse “made a choice and went all in on what is right and truthful,” Siegel said.

Garaufis said the sentence “takes into account his criminal conduct” but also “his substantial cooperation” during the two trials. The judge said Pearse had been estranged from one of his sons over his criminal conduct and added that the son might want to reconsider.

“I would hope he takes a look at what his father has done over the last six years to rehabilitate himself and make himself a stronger, better person,” Garaufis said.

Government’s ‘Rosetta Stone’

Prosecutors called Pearse their “Rosetta Stone,” saying he helped explain the complex international fraud scheme to the jury. Chang was sentenced in January to 8 1/2 years in prison for his part in the fraud.

During the two trials, in 2019 and last year, Pearse described for the jurors how he helped arrange Credit Suisse loans for three companies owned and controlled by the Mozambican government, allowing him and two bank colleagues to pocket millions of dollars in kickbacks. The bank arranged a total of $2 billion in loans.

The 2019 US trial ended in the acquittal of an employee of shipbuilder Privinvest Group who was accused of defrauding investors in the bond scheme.

Pearse’s lawyer Lisa Cahill asked that her client be spared from prison, arguing he “did the right thing” and spent 11 grueling days on the stand. She said her client had “suffered grievously” for his crimes. 

In a letter to Garaufis, Pearse apologized to Credit Suisse and investors as well as to his own family, saying he had worked hard in hopes of earning back the trust of those he had betrayed. 

In the sprawling international fraud, the Mozambique government fraudulently got billions of dollars in loans from Credit Suisse and Russia’s VTB Bank PJSC to fund three maritime projects, including the tuna fishing fleet as well as shipyards and anti-piracy boats. 

On March 4 the Financial Conduct Authority placed bans on Pearse and a second former banker for their roles in arranging the corrupt loans.

UBS Group AG inherited the case when it acquired Credit Suisse in 2023 amid a banking crisis. 

The case is US v. Pearse, 18-cr-681, US District Court, Eastern District of New York (Brooklyn).

–With assistance from Upmanyu Trivedi.

(Updates with remarks by Pearse, prosecutor and judge in first two sections.)

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