Carlos Fragoso had settled, the Rex Trust, in Jersey, in 1999. At that time, Mr Fragoso described himself as a civil engineer and informed the trustee that the funds settled into the Trust were the proceeds of civil engineering consultancy contracts which he had worked on over the last twenty years, predominantly in the United States, Swaziland and South Africa. He did not disclose that he held public office in Mozambique.
Following the conviction of a UK construction firm, Mabey Johnson, who had been paying bribes in various jurisdictions in return for contracts, including Mozambique, an investigation began in relation to the source of Mr Fragoso’s funds. The matter came before the Royal Court in Jersey in 2013, where it was held that all of the funds within the Rex trust represented bribes received by Mr. Fragoso in his role as a public officer for Mozambique.
This led to a suspicion that an earlier trust settled by Mr Fragoso, the Tolvex Trust, may also contain tainted funds resulting from bribery and corruption. 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.
According to the October 31, 2013 Judgment by the Isle of Jersey Royal Court in Lloyds Trust Co (Channel Islands) Ltd. v. Fragoso, 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. 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. 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) 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.
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). 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. 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).
Republic of Mozambique Office of the Attorney General
Jersey's Attorney General, Mark Temple KC, said: “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."
Assets returned
On 7 May 2024, Jersey’s Attorney General Mark Temple KC signed a Memorandum of Understanding (MOU) to return the forfeited assets to the Republic of Mozambique.
Under the terms of the MOU, the returned assets will be used by Mozambican authorities to combat financial crime. The majority is to be utilised in supporting 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. 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 in international and judicial cooperation in criminal matters.
Assets Frozen/Seized
| Document Title | Size and Format | Document Type | |
|---|---|---|---|
| Link | Court document | Go to site | |
| Fragoso Jersey Lloyds Constructive Trust 2013 | 387.87 KB pdf | Court document | Download |
| Fragoso Jersey Court Endorses Proprietary Claim to Proceeds of Corruption Baker Partners | 73.26 KB pdf | Court document | Download |
| Link | Government report / press release | Go to site | |
| Link | Government report / press release | Go to site | |
| Memorandum of Understanding | 1.97 MB pdf | Asset Return Agreement/MOU | Download |