Jersey Returns £829,500 'BRIBE MONEY' to Republic of Mozambique

Jersey's Attorney General and the Vice-Attorney General of Mozambique have today signed a Memorandum of Understanding to return over £829,500 to the Republic of Mozambique. This is the first asset return arrangement entered into by Mozambique.  It follows a successful application by the Attorney General to forfeit funds held in a Jersey Trust which had been placed there by a Mozambican national who had received corrupt payments in the course of his employment in Mozambique.

Following assistance from the Mozambique authorities, the Economic Crime and Confiscation Unit in the Law Officers' Department used the provisions of the Forfeiture of Assets (Civil Proceedings) (Jersey) Law 2018 to apply successfully for forfeiture of the funds held by the Trust.

Carlos Fragoso settled monies into the Tolvex Trust

1. Carlos Fragoso settled monies into the Tolvex Trust in 1996 stating that he was a civil engineer seeking to benefit his family with savings from his former earnings. However, during his career he had held several high-profile positions, including the Directorship of the National Directorate of Roads and Bridges and the Presidency of the National Road Administration.
2. In 2013, the Royal Court found that Fragoso had settled another Jersey trust using the same deception as to his employment and Source of Income. The court found that his assets were the proceeds of bribes paid to him by firms wanting to secure construction contracts in Mozambique.
3. This led to a suspicion that the Tolvex Trust may also contain tainted funds resulting from bribery and corruption.

October 31, 2013 Judgment

1. According to the October 31, 2013 Judgment by the Jersey Royal Court in Lloyds Trust Company v Fragoso & ors [2013] JRC 211, Hoy, Government of Mozambique and HM Attorney General {[2013] JRC 211), the funds held in The Rex Trust formed by Mr. Fragoso was ordered to be paid to the Government of Mozambique.
2. In so doing, the Court held that Lloyds Trust Co as the trustee of the Rex Trust held the funds as constructive trustee for the Government of Mozambique.
3. As described in the Judgment, the Trust was established in 1999 by Mr. Fragoso who had described himself as a civil engineer and he informed the Lloyds TSB Offshore Trust Limited that the funds settled into the Trust were the proceeds of civil engineering consultancy contracts.  "He did not disclose that he held public office in Mozambique." (para 3)
4. In 2010, Lloyds Trust became aware of the conviction of the UK engineering firm Mabey & Johnson on charges of foreign bribery and that the Prosecution's Opening Statement included mention of bribes paid by the company to Mr. Fragoso in 1997 and 2000.
5. In 2010, Lloyds filed a Suspicious Activity Report to the Jersey Financial Crimes Unit and informed Mr. Fragoso of its concerns and "required him to provide evidence as to the source of the funds, and specifically, that the funds were not the proceeds of crime." (para 6).
6. Lloyds, joined by the Government of Mozambique, sought an order from the Jersey Royal Court that the trust fund, net of costs, be paid to the Government of Mozambique.
7. The Court held that "It is true that it is not possible to trace all of the funds within the Trust back to Mabey & Johnson, but we find that, on the balance of probabilities, all of the funds within the Trust represent bribes received by Mr. Fragoso in his role as a public officer for Mozambique" including for the reasons that he lied to Lloyds as to his occupation and source of funds when the Trust was established and his inability to produce any evidence as to the source of the remaining funds within the Trust which cannot be traced back to Mabey & Johnson and that his legitimate source of income during the material period was his salary [which according to the information provided by the Government of Mozambique was equivalent to 1,500 Euros per month] (paras 12 and 18).

Read more here.

• https://www.comsuregroup.com/news/after-x27-years-bribe-money-placed-in-jersey-trust-bank-to-be-returned-to-mozambique/
• https://star.worldbank.org/asset-recovery-watch-database/carlos-fragoso
• https://star.worldbank.org/sites/default/files/2023-11/Fragoso_Jersey_Lloyds_Constructive_Trust_2013_JRC_211.pdf
• https://star.worldbank.org/sites/default/files/2023-11/Fragoso_Jersey-Court-Endorses-Proprietary-Claim-to-Proceeds-of-Corruption_Baker_Partners.pdf

Under the terms of the Memorandum of Understanding

1. Under the terms of the Memorandum of Understanding agreed today with Mozambique, the returned assets will be used by Mozambican authorities to combat financial crime. The majority will be used will be used to support the development and expansion of key enforcement agencies in the Republic of Mozambique, namely the Central Office for Asset Recovery, the Central Office for Combatting Corruption, and the Asset Management Office of the Republic of Mozambique.
2. The funding will also be used by the Mozambique Attorney General's Office and the Mozambique National Criminal Investigation Service to support the delivery of a five-day training course to sixty trainees drawn from all eleven provinces of Mozambique concerning international and judicial cooperation in criminal matters.

Jersey's Attorney General, Mark Temple KC, said:

1. “I am delighted that Jersey has been party to Mozambique's first asset return agreement which will result in the strengthening of law enforcement and anti-corruption agencies in Mozambique. I am grateful for the assistance provided by the authorities of the Republic of Mozambique in this matter.
2. I am also grateful to the late Gretta Fenner of the Basel Institute on Governance, who tragically died in a car accident in Kenya recently, who provided vital assistance in relation to the agreement through the Institute's International Centre for Asset Recovery.
3. The successful forfeiture of these assets and their repatriation to the people of Mozambique is another example of the benefit of having a specialist unit, the Economic Crime and Confiscation Unit and the Mutual Legal Assistance Team in the Law Officers' Department working together to combat international financial crime and to return the proceeds to the country from which they were taken."

The Vice-Attorney General of Mozambique, His Excellency Alberto Paulo,​ said:

1. "Today we are honoured to receive funds that were illicitly diverted from Mozambique and hidden in the Bailiwick of Jersey, which have been recovered as a result of exemplary cooperation with the authorities of the Bailiwick of Jersey. The return of these funds represents a triumph for Mozambique, for justice and for the rule of law. It demonstrates the ongoing commitment of our States to ensuring that crime does not pay and that public resources must be used ethically and transparently to benefit the society as a whole.
2. “We would like to take this opportunity to once again thank the Economic Crime and Confiscation Unit and the Mutual Legal Assistance Team at the Law Officers' Department and especially the professionals who directly or indirectly worked on this case, to recover these assets, for their professionalism, dedication and exemplary cooperation.
3. “We would like to thank the late Mrs Gretta Fenner from the Basel Institute's International Centre for Asset Recovery for the role she played in bringing the Mozambican judicial authorities closer to Jersey judicial authorities, contributing to the establishment of our cooperation, whose fruits we are reaping today."

Source

https://www.gov.je/News/2024/Pages/AssetReturnArrangementRepublicOfMozambique.aspx