Kiwi in Mozambique scandal a man of mystery

Analysis: The NZ-born banker accused of involvement in profit and corruption on an epic scale is an elusive figure, writes John Anthony.

A47-page US indictment against Kiwi banker Andrew Pearse reads like a script to a Hollywood movie.

The plot plays out over four years, and centres around three bankers who allegedly defeated the internal controls of one of the world’s biggest investment banks to transfer US$2 billion (NZ$2.9b) in corrupt loans to one of the world’s poorest countries for their personal profit.

It features a French billionaire’s ship-building business, corrupt Mozambique officials, hundreds of millions of dollars in international wire transfers and allegations of money laundering, bribery, conspiracy and fraud against the small group of former Credit Suisse employees.

And at the centre of it all is Pearse – a 49-year-old Christchurch man, who, until his arrest in London last Thursday, was virtually unknown in New Zealand.

Now Pearse is making international headlines as the world’s media covers one of the biggest money laundering scandals of recent time.

Who is Andrew Pearse?

Pearse appears to be a ghost online. He has no obvious profiles on Facebook, Twitter or LinkedIn. There is no trace of him on Credit Suisse’s website, or any other company website for that matter.

For someone who was head of Credit Suisse’s global financing group, Pearse kept a low profile.

Pearse (full name Andrew James Pearse) was born on September 6, 1969 at St George’s Private Hospital in Christchurch, his birth certificate shows. His mother was also born in Christchurch, while his father was born in Bombay (now Mumbai), India.

New Zealand property records show Pearse owned a house in the Christchurch suburb of Merivale, which had a 2016 CV of $1.4 million.

He also owned a home in Belfast, Christchurch, which had a 2016 CV of $440,000. The Panama Papers, which came about following a massive leak of documents from law firm Mossack Fonseca, linked Pearse to this address.

Pearse transferred the title of the properties in 2017.

Both are now co-owned by a company with the same initials as Pearse, called AJP Trustee Services. The other owner is an individual named Nicola Frances Bell.

A Christchurch lawyer, who is a director of AJP Trustee Services along with Bell, would not confirm or deny whether she knew Pearse.

Beyond that, there seems to be no trace of Pearse in New Zealand.

Where is Pearse now?

Pearse and two other alleged coconspirators, Surjan Singh of the UK and Detelina Subeva of Bulgaria, were arrested in London after being charged in New York by the US Department of Justice of defrauding US investors.

The three former Credit Suisse employees face extradition to the US but in the meantime have been released on bail.

Efforts to contact Pearse, or uncover who is his legal representative, have so far proved fruitless.

The grand jury indictment shows the three bankers, plus two other alleged co-conspirators, Lebanese salesman Jean Boustani and Mozambique’s ex-finance chief Manuel Chang, face one count of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud and one count of conspiracy to commit money laundering.

Pearse, Singh and Subeva also face a count of conspiracy to violate the Foreign Corrupt Practices Act anti-bribery and internal controls provision by knowingly and willfully conspiring to commit offences against the US.

If convicted the defendants will need to forfeit any property constituting or derived from proceeds obtained as a result of the offending.

What about Credit Suisse?

The Swiss-founded multinational investment bank has not been accused of any wrongdoing.

In a written statement it said the three former Credit Suisse employees had been accused of circumventing its internal controls and using personal email accounts to conceal their involvement in a fraud connected to Mozambican government officials between 2011 and 2013.

What’s the crux of the indictment?

The indictment outlines in elaborate detail how Pearse, Singh, Subeva, Boustani and Chang, and other unnamed defendants, allegedly arranged deals over several years that allowed Mozambique to borrow US$2b (NZ$2.94b) for maritime projects and coastline protection.

Using intercepted emails and tracked wire transfers as evidence, prosecutors accused the defendants of concealing loans and withholding information from investors while pocketing millions of dollars in bribes and kickbacks.

Mozambique government officials created three companies to undertake maritime projects – surveillance, tuna fishing and building and maintaining shipyards.

Through a series of transactions between 2013 and 2016 the companies borrowed more than US$2b from Credit Suisse.

The companies entered into contracts with one of the world’s biggest ship building groups, Privinvest, to complete maritime projects.

The loans were supposed to be used exclusively for the projects and nearly all of the borrowed money was paid to Privinvest – the sole contractor for the projects, the indictment said.

In reality the defendants created maritime projects as fronts to raise money to enrich themselves and intentionally divert portions of the loans’ proceeds to pay at least US$200m in bribes and kickbacks to themselves, officials and others, it is alleged.

The borrowing took place despite an agreement the International Monetary Fund (IMF) had with Mozambique that it would provide assistance so long as Mozambique agreed to limit its borrowing from private lenders.

The IMF suspended lending to Mozambique after it found out about the deals.

For someone who was head of Credit Suisse’s global financing group, Andrew Pearse kept a low profile.

What was Pearse’s alleged role?

The indictment portrays Pearse as being a key player in the scheme.

Pearse was the head of Credit Suisse’s Global Financing Group until about September 2013, but around April that year started setting up subsidiaries, called Palomar, with Privinvest, which is owned by Lebanon-born French billionaire Iskandar Safa.

The Panama Papers show Pearse was a shareholder of Palomar Holdings and Palomar Energy Holdings, both registered to tax haven the British Virgin Islands. The papers link Pearse to the residential address in Belfast, Christchurch.