Accountants behind the firm Ennesse have been charged with money laundering and tax evasion after an investigation found discrepancies in tax and VAT payments of €1.5 million.
Appearing in front of Magistrate Rachel Montebello, Nigel Scerri and Mikaela Scerri were accused of money laundering, tax evasion, not paying VAT and providing false documents to the Tax Commissioner, among a raft of other charges.
Charges were also filed against the companies Ennesse, Nimik Ltd, Accountingwise Ltd, Davvero Ltd, Payrise Limited, NYG Ltd, Sopralific Ltd, Starseekers Ltd, Volando Ltd, Drivingforce Limited, Delvetro Ltd, Double Leisure Ltd, Obregado Ltd, Performante Ltd and Semprenoi Ltd.
They pleaded not guilty to the charges.
During the sitting, an accountant from the Malta Tax and Customs Administration (MTCA) said the case had been referred to the MTCA by the police and initially they set out to audit the period between 2016 and 2022, however, they ended up compiling a report current to May 2024.
The tax audit analysis found that the couple had acquired some €12 million in property during this time and had 26 active bank accounts, 19 based locally and the rest around other EU countries, including Germany, Belgium and Lithuania.
The audit also discovered that the couple had taken out two home loans, one of around €400,00 and another of around €500,000, that had been paid back in three and eight months respectively.
It was something of a red flag for them to be able to repay such vast amounts of money back to lenders in a relatively short period
When asked to explain to the court what stood out to her as suspicious during this review, she noted it was something of a “red flag” for them to be able to repay such vast amounts of money back to lenders in a relatively short period.
She also highlighted discrepancies in community acquisitions of over €280,000, with suppliers indicating that had provided more in services than the amount indicated.
This was determined thanks to a shared VAT refund database across the EU. The accountant said that when businesses file for a VAT return they log every sale of goods and services in this shared database and list the names of their clients and how much they provided.
She also said that investigators compared the accused’s income and calculated what could have been saved versus the assets accumulated during the time under review and this had also been flagged as concerning.
The accountant noted that the MTCA worked out the appreciation of assets based on their declared income and subtracted their living expenses, adding they are usually quite conservative and do not typically take into account certain lifestyle choices that may influence expenses, such as travel.
When asked why this is so, the accountant said it was policy to stick to what the NSO calculates as the average yearly living expense to maintain a family of four, around €28,000. Discussing a request by the prosecution for a freezing order, lawyer Joe Giglio said an administrator had been in control of their finances since October. The court accepted the request for a freezing order and gave prosecutors 90 days to indicate the assets they wanted to be frozen.
Police inspectors Tonjoe Farrugia and Robert Azzopardi, together with AG lawyers Andrea Zammit and Rebecca Spiteri prosecuted.