Mozambican Accused in $2 Billion Tuna Scandal Is Extradited to New York

The former finance minister of Mozambique, accused of helping orchestrate a financial corruption scandal that nearly caused the collapse of his nation’s economy and defrauded American investors, was extradited to the United States from South Africa on Wednesday to face charges in Federal District Court.

Manuel Chang, the former minister, is suspected of signing off on about $2 billion worth of loans concealed from public view and partaking in a scheme to embezzle hundreds of millions of dollars. He faces charges in the U.S. of conspiracy to commit fraud and money laundering.

The authorities accuse Mr. Chang and members of the country’s political elite of luring investors with the promise of development projects in the tuna fishing industry and maritime security in Mozambique, a southern African nation on the Indian Ocean.

About half a billion dollars went missing, with investigators alleging the money was used to pay bribes and kickbacks to foreign officials and former bankers.

Mr. Chang, who has denied any wrongdoing, was transferred to the custody of United States officials and left South Africa from Lanseria International Airport, north of Johannesburg.

Mr. Chang had been arrested in Johannesburg in 2018 on his way to the United Arab Emirates, and has been in custody since then. Mozambican officials fought to have him extradited back to the country to face charges there, but civil society organizations pushed to have him sent to the U.S., arguing that Mr. Chang would have been given preferential treatment from his political allies back home.

South African officials had agreed to send Mr. Chang back to Mozambique, but a South African court overturned the decision and ordered his extradition to the U.S., where he is expected to be arraigned in federal court in Brooklyn.

“We want Mr. Chang to speak in a judiciary where he is not treated as king, he is treated like a normal citizen, which is not the case of Mozambique,” said Adriano Nuvunga, the chair of Fórum de Monitoria do Orçamento, a civil-society group based in Mozambique’s capital, Maputo.

The group filed the court challenges that eventually led to Mr. Chang being transferred to the United States.

The forum hopes that a trial of Mr. Chang in the United States will finally help locate the approximately half a billion dollars still unaccounted for, and identify “who gave Chang the orders to sign those illegal bonds,” Mr. Nuvunga added.

Adam Ford, one of Mr. Chang’s lawyers, said he would seek to have the case dismissed because Mr. Chang’s right to a speedy trial was violated. Mr. Ford said in a letter sent in June to the Brooklyn judge overseeing the case that his client had been incarcerated in “appalling conditions” in solitary confinement in South Africa.

“These competing requests to extradite Mr. Chang trapped him in a Kafkaesque labyrinth of never-ending administrative and court proceedings that continue to this day,” Mr. Ford wrote.

A superseding indictment filed in 2019 accused Mr. Chang and five other men of using the U.S. banking system to conduct fraudulent transactions, including using loan proceeds to pay bribes, and enticing American investors with a “road show” held in New York City. The men hid from the public and financial institutions the “near bankruptcy” that companies faced as a result of the loans being diverted, according to the indictment.

The financial deals took place while the current president, Filipe Nyusi, served as defense minister. Some believe that a trial in the United States could cast a bad light on the president’s political party, Frelimo.

Funds for the government’s borrowing were facilitated through Credit Suisse and VTB Capital, a Russian bank, from 2013 through 2015, and amounted to about 12 percent of Mozambique’s gross domestic product. The loans were guaranteed by the government without the proper approval from Parliament.

The full scope of the government’s borrowing was revealed in 2016, when Mozambique defaulted on its sovereign debt. The economy plunged into crisis in what became known as the “tuna bond” affair and “the hidden debt scandal.”

Last year, in a trial so large it was held outside the prison under a tent, 11 defendants were convicted in a Mozambican court in connection with the scandal, including the son of a former president.

“The crimes committed had effects that will be felt for generations,” Judge Efigenio Baptista said in handing down the sentences. “The country was blocked off, financial aid to the state was suspended and poverty worsened for thousands of Mozambicans.”

Lynsey Chutel contributed reporting from Johannesburg, and Karen Zraick from New York.