Businessmen testify on loans scam

A number of businessmen explained to a magistrate yesterday how a Greek man defrauded them of close to half a million euros after promising to secure loans for them.

Testifying in the compilation of evidence against Konstatin Anastasiou, 36, who resided at Wardija, the businessmen recounted how they were offered loans running into millions of euros. They said they were not after such big loans but the accused insisted he did not deal in small amounts.

Mr Anastasiou is facing two charges of organised crime, a charge of conspiracy to commit a crime, six charges of misappropriation and another six of fraud to the detriment of several people.

He stands charged with defrauding €125,000 (Lm52,000) to the detriment of John Debono and Joseph Quarttromani, of Tower Manor Ltd; €75,000 (Lm31,000) to the detriment of Joseph Farrugia of Acorn Distributors; another €75,000 (Lm31,000) to the detriment of Ambrose Muscat; €70,000 (Lm30,000) to the detriment of Raymond and Fabio Grima of Grimax Ltd; €57,000 (Lm24,000) to the detriment of Alan Briffa of Ready-To-Move-In Ltd and another €21,000 (Lm8,000) to the detriment of Anthony Sultana of Modern Image Ltd.

Mr Sultana said that in June 2004 he was approached by a friend who informed him that an acquaintance needed a photographer for his girlfriend. He carried out a photo session and when the accused went to the studios to collect the photographs he could see what operations the company was involved in.

"At the time the company was looking for an investor to fork out Lm200,000 and the accused said he could get much more. He said there would be expenses and when I said I had no money to pay he said he would pay the expenses himself. I felt there was nothing to lose and started preparing business plans," Mr Sultana said.

The witness said at that at about mid-September 2004 the accused changed tack and said the company should cough up some money to cover part of the expenses involved in the loan and also to show some commitment. A sum of €22,000 was handed over to the accused. The accused had told him that once the loan was secured the company would pay him back his expenses together with a commission of 0.5 per cent, the witness said.

He said the contracts for the loan had to be signed in Bratislava, in Slovakia. He was given a lot of documents in Slovak but the loan never arrived.

"The money was supposed to be given to us at the end of September 2004 but the accused came up with excuses and the deadline was delayed.

The money paid to the accused were never refunded, in spite of repeated demands, Mr Sultana said.

Mr Briffa testified that he met the accused some two-and-a-half years ago after being introduced to him by a certain George Muscat.

The witness said he had a problem getting a €1 million loan from the bank for a petrol station he wanted to build. The accused offered a loan but said he could not get loans of under €10 million. He proposed a system of insurance that would have to be repaid in instalments of €250,000 a month.

The accused also requested a down payment of €200,000 but as the witness did not have the money the accused accepted Lm10,000 in cash. In addition, Mr Briffa had to pay off money the accused owed Mr Muscat. Mr Briffa said he went to Bratislava where contracts were signed. In Bratislava he met Peter Kovac, a partner the accused had in a company called Selective Company Consult, which was meant to secure the loans. The €10 million loan never materialised and whenever he pressed the accused for it, the accused would say things were on course.

When Mr Briffa insisted he should have his money back, the accused told him he was in a bad financial situation. Mr Briffa said he had paid the accused and had also entered into an agreement to pay Mr Muscat the sum of Lm15,000 which the accused owed him.

Mr Quattromani said his company was put in contact with the accused by an estate agency and he was informed that the minimum loan he could request was of €5 million. Following negotiations, the accused asked for €125,833 (close to Lm55,000), which was paid through a Maltese company.

The witness said he started pressing the accused for the loan and when he realised that this was a scam, he asked for his money back. He then received a letter from Tetra Bank about payment he would be receiving but when he showed this to local banks he was told that the letter did not have any value.

He said the accused's partner, Mr Kovac, then signed an agreement declaring he owed the company €125,833 and obliged himself to pay monthly instalments of €2,000. Mr Kovac, paid €4,000 and the accused paid €2,000 as the first instalment but when the second instalment was due the accused was only able pay half of it and Mr Quattromani referred the case to the police.

Mr Grima said he needed a loan of Lm430,000 to buy a complex in Bugibba. He was introduced to the accused who said he could get him a loan of €2.5 million. Charges, commission and interest had to be paid.

"We also had to give him 10 per cent of our company. An agreement for €5 million was signed on January 20, 2004. A total of €25,000 was paid as charges to the accused," he said.

In all, Mr Grima said he paid the accused €73,500. But the loan never came through.

The case continues.

Police Inspectors Ian Joseph Abdilla and Paul Vassallo prosecuted.

Lawyers Martin Fenech and Shazoo Ghaznavi are defence counsel.