Lebanese ship salesman Jean Boustani is on trial in federal court in Brooklyn, New York. Prosecutors accused him of masterminding an elaborate conspiracy that they claim defrauded investors in the U.S. However, the prosecution’s case appears weak. Boustani’s attorneys say the case should never have been brought in the United States in the first place. Boustani has few or no ties to the U.S., had no contact with the U.S. investors and did not violate U.S. law.
Contracts and Loans
Boustani works for a global shipbuilding company called Privinvest. The company received three contracts from the southeast African country of Mozambique to build a fleet of fishing boats, a shipyard, and a defense system for the country’s coastline. To pay for the projects, the Mozambique government took out almost $2 billion in loans from Credit Suisse and from the Russian VTB Bank. Credit Suisse, in turn, sold parts of its loans to investors, some of whom were in the U.S. Mozambique has failed to pay back the loans.
Many Were Indicted
Many people were indicted in this case. Besides Boustani, prosecutors also indicted former officials of Mozambique, including the former finance minister, business executives, and Credit Suisse bankers. The prosecution alleged a grand conspiracy involving bribery, kickbacks, and fraud, but as the trial wore on, it became apparent that the events in general, and Boustani’s role in particular, were not as egregious as had been alleged.
The Prosecution’s Changing Story
The prosecution changed its story over time. At first, it painted a picture of a scheme involving many players. It was only later that the prosecutors focused on Boustani and labeled him the “mastermind” of the scheme. Yet, as the facts emerged in the trial, it became apparent that Boustani did not deserve the prosecution’s label and that the scheme itself had not been what the prosecution claimed.
The Ships Were Delivered as Promised
Privinvest, in fact, did fulfill its contracts with the Mozambique government. It delivered the ships and systems it had contracted to provide. The prosecutors claimed that Privinvest overcharged Mozambique, but the evidence it presented for this was weak. The loans to Mozambique were used to purchase the goods that Privinvest provided. Boustani was not involved in drafting the loans or in selling them to the investors.
Bankers Were Not Always Credible
Two bankers at Credit Suisse did admit to taking millions of dollars in bribes and to ignoring their bank’s rules. It appears that the main victim of their fraud was the bank itself, not U.S. investors. Furthermore, the bankers’ testimony was inconsistent, which cast doubt on their credibility. The bankers had been charged with multiple crimes, but they ended up pleading guilty to only a single charge each.
Will Justice Be Served?
Boustani’s fate is now up to the jury. All the events that he was involved in took place outside of the U.S., so it’s hard to see how he broke U.S. laws. His employer, Privinvest, successfully completed its contracts. The testimony of the prosecution’s witnesses was confusing and often unclear.