A US citizen has filed a court application in Malta claiming $500 (€468) million in compensation after a US Department of Defence special agent “falsely” accused him of fraud and money laundering to the detriment of the US military.

Frank Rafaraci, a 71-year-old Italian-American businessman based in Dubai, says that US investigator Cordell Trey De la Pena misrepresented evidence to both US and Maltese authorities.

Rafaraci contends that this misinformation was instrumental in his arrest in Malta and subsequent legal battles.

The case involves a high-profile investigation into alleged international fraud and money laundering schemes involving the US Navy. 

Rafaraci, a former CEO of a Maltese company involved in contracts with the US military, faced accusations of orchestrating a complex scheme to defraud the US government of over $50 (€47) million.

He was briefly detained in Malta three years ago following a joint operation by Maltese and US authorities and his arrest was based on allegations brought forward by De la Pena.

Rafaraci faced extradition procedures to the US but walked free in September 2021 due to a series of legal technicalities.

He had been wanted by the District Court of Columbia in the US over a raft of charges, including conspiracy to commit bribery, wire fraud and conspiracy to commit money laundering. 

The allegations stemmed from charges that Rafaraci’s company, Multinational Logistics Services Ltd (MLS), submitted inflated invoices for port services to US Navy vessels, pocketing the difference.

US investigator De la Pena highlighted three specific port calls, including those of the USS Carl Vinson, USS Rushmore, and USS Theodore Roosevelt, as key examples of the alleged fraud.

Rafaraci’s legal team challenged these claims vigorously, arguing that these were not only flawed but intentionally distorted.

The plaintiff’s legal counsels assert that De la Pena relied on incorrect data, confusing invoices from different ports and time frames.

One of the invoices cited, purportedly involving a visit to Manama, Bahrain, was reportedly for a different ship’s stop in Dubai, raising significant doubts about the integrity of the evidence, they said.

In his submission, Rafaraci argues these accusations were baseless and crafted to paint him as a high-risk individual, effectively ending his professional standing and forcing his resignation from influential business roles.

He also claims that these accusations were defamatory, and they were publicised to an international audience, damaging his reputation irrevocably.

Rafaraci also contests the manner in which he was arrested.

He argues that the special agent posed as the owner of Franklin Financial Consulting LLC, based in Pennsylvania, and tried to set up a business meeting with him in a country that had an extradition treaty with the US.

High-risk individual

Rafaraci says that the business meeting was nothing more than a fraudulent attempt to bring Rafaraci to Malta, where he could be arrested by police officers and his extradition requested on behalf of the US government based on De la Pena’s incorrect allegations.

He also argues that the extradition request and details of the complaint were passed on to the press in Malta.

This led to the story being prominently reported by The New York Times, The Wall Street Journal, The Washington Post, The Daily Telegraph, Corriere della Sera, La Repubblica, La Sicilia, La Gazzetta del Sud, Times of Malta, and several blogs.

Rafaraci’s lawyers argue that, due to De la Pena’s recklessness, the plaintiff has endured reputational damage and financial loss across the multiple jurisdictions in which he conducts business, including the United Kingdom, Canada, and Singapore. 

He is still considered a high-risk individual despite not having committed any fraud or acts of money laundering.

Rafaraci points out that the US Department of Justice ultimately dismissed the fraud and money laundering allegations after additional evidence was presented. 

He compares his treatment to other high-profile investigations, such as the so-called “Fat Leonard” case, where defence lawyers similarly scrutinised De la Pena’s investigative practices.

In his application to the Civil Court, Rafaraci seeks a formal declaration that De la Pena acted recklessly and negligently, misrepresenting facts with a “wilful disregard for the truth”.

The application was signed by Dr Mark Refalo.

In October 2021, after the case was thrown out by the Maltese courts, Rafaraci went to the US of his own free will to settle his affairs with authorities in his homeland.

 In view of this, the extradition request was withdrawn and the court proceedings were dropped.

His legal counsels in 2021 included lawyers Giannella de Marco, Stefano Filletti, Stephen Tonna Lowell and Mark Refalo.