Expert witnesses are essential in evaluating the credibility of complex criminal cases. Few such cases in Brooklyn federal court are as complicated as U.S. v. Boustani in which a salesman of ships and systems to the African nation of Mozambique is accused of conspiracy and fraud.
Last Friday, prosecutors called to the stand Michael Formosa, an expert who was paid by the international investment bank Credit Suisse to assess the real valuation of the ships sold to Mozambique. Based on the laughter by those in the courtroom toward the end of Mr. Formosa’s cross examination, Mr. Formosa’s expertise was very much in doubt. It appeared that his appraisal had been overvalued by Credit Suisse — and the prosecutors.
Prosecutors in this high-profile case argue that Boustani’s contracts with Mozambique were “shams”, designed to provide kickbacks to government officials and were, therefore, inflated. Boustani and his employer, global shipbuilder Privinvest, deny those allegations.
The government turned to Mr. Formosa to try to show the boats were overpriced.
In answer to questions by an attorney for Jean Boustani, the defendent, Mr. Formosa conceded that he had no formal education in engineering, naval architecture or boat valuation. He said he had never worked on a naval vessel and had never been an employee of a shipbuilder. He also said he had never been involved with the sale of boats in the “field”.
Mr. Formosa said his background was with the publishing company Jane’s, which writes about ships. He said he hired others to do the substantive work on the evaluation. He was, in effect, the report’s editor and overseer of its “methodology”.
But his lack of grounding in the specifics of his valuation was jaw dropping. Although Mr. Formosa disputed the assertion, defense counsel demonstrated with emails that the entire study was done in just four days. This was for an assessment of hundreds of millions of dollars worth of ships and systems.
Privinvest sold not just the ships but also training, systems and after delivery services. Mr. Formosa said he didn’t know whether the boat prices he compared the Privinvest’s deliveries to were similarly “turnkey” operations.
But most stunning revelations of all was that Mr. Formosa couldn’t recognize pictures of ships his report compared the Mozambique deliveries to, nor could he recognize the ship that he evaluated, the Ocean Eagle 43.
Q: Now, Mr. Formosa, do you know what we’re looking at right here.
A: An Ocean Eagle 43.
Q: Is that a guess? Do you know?
A: No, it’s a guess.
Q: Okay. You got it. This is an Ocean Eagle 43. This is the boat that was the subject of your report, right?
A: Yes
The courtroom erupted in laughter, and with it, the government’s case took a mighty hit.
