Court seizes funds from short lets company owned by absconded Russian

A company suspected of scamming holidaymakers who booked short-term accommodation in Malta has had money it held in local accounts seized and given to the government.

The court order is believed to be the first of its kind in Maltese courts.

Anatolyevhic Skylarov, a Russian national who had been married to a Maltese woman, was the director and sole shareholder of Oleg Limited, a company which registered its properties on booking.com and expedia.com and rented them as short lets.

Between July and August 2018, the police received a number of reports from individuals claiming that they had fallen victim to fraud after booking accommodation in Malta that either did not exist or was not available.

Oleg registered 25 properties on booking.com in 2016, later informing the company in January 2018 that the number of rooms available had increased. But in July 2018, the company informed the online booking platform it could not honour reservations.

In August of that year, the police received a letter from Bank of Valletta (BOV) showing that several payments made to Oleg Ltd were eventually recalled from local and international payment providers, totalling €117,000.

UK-registered financial services company myPOS Europe Limited filed a suspicious activity report with the police's Economic Crimes Unit the following month, suspecting Oleg Limited was involved in money laundering, proceeds of crime or financial terrorism.

Chargebacks 

The payments company had received a number of chargeback requests from customers who had booked stays at properties purportedly owned by Oleg Ltd.

It processed the chargebacks and ended up in red to the tune of more than €35,000 after the money held in Oleg Limited’s bank account was transferred out before the company could recover it.

The UK company requested an investigation and provided the transactions for the period between May 24 and July 3, 2018.

Booking.com also filed a criminal complaint after it lost over €1.6 million in deposit refunds and providing alternative accommodation to those who had booked at Oleg Ltd’s properties.

The online platform said Oleg had increased the number of rooms available for dates starting from July 2018, but did not increase the size of the property. Reservations and deposits were paid before July 2018.

Booking.com alleged that Oleg Ltd had been collecting deposits from guests knowing it would not be able to provide the accommodation. It said it was unable to reach Oleg Ltd representatives starting from July 2018.

Police investigation

The police tried to contact Skylarov, but no one picked up the phone. They went to his residence in Gżira and found his former wife, who informed them that after their separation, he had left and possibly absconded.

The police started analysing the transactions and flagged 25 suspicious transactions amounting to almost €540,000 between June 13 and July 10, 2018. The sum was transferred to Denis Kochetov and the description of the payment was listed as “Villa construction”.

In October 2018, an attachment order was issued against Oleg Ltd and Skylarov. From requests made to BOV, police determined Oleg Ltd had three bank accounts: a savings account with no money in it, a current account with €757.31 and a business overdraft holding €45,123.11.

The police also established that Skylarov left the country on May 3, 2018, and was probably no longer in Europe.

Both myPOS Europe Limited and booking.com informed the police they were no longer interested in the case.

Asset recovery

The evidence collected led the Attorney General to file a non-conviction-based confession action in October 2023 – a law enforcement tool enabling the authorities to recover assets in the absence of a criminal conviction.

In such actions, the government must prove that a crime was committed and that the property was derived from or used in the commission of the crime.

The action may be used to recover property in a wide variety of cases, including drug trafficking, terrorism and terrorist financing, money laundering, arms trafficking and any other crime liable to imprisonment of not less than ten years.

Skylarov, the sole director and shareholder of Oleg Ltd did not contest the action.

Court decision

The court noted that Oleg Ltd’s actions had impacted several people and that a substantial amount was transferred out of its bank account.

Fraud had probably occurred, and the money held in the two bank accounts was proceeds of crime, it concluded. It also held that the company served as a vehicle to facilitate money laundering and transfer the funds out before they could be recovered.

For a civil case, it was sufficiently proven that money laundering had occurred and that the AG was able to exercise the action.

The court held that even if there were lawful funds in the two bank accounts they would still be subject to confiscation, noting that one would need to prove that the funds were not laundered proceeds.

In this case, Oleg Ltd’s bank accounts held a total of €45,880.42. The court observed that a total of €539,553.42 had already been transferred out of the country.

It also noted that Oleg Ltd owed €35,267.51 to myPOS Europe Limited while booking.com incurred €1,624,869.97 in refunds and alternative accommodation.

The court declared that the money held in the two BOV bank accounts be subject to confiscation and ordered the money forfeited in favour of the state. 

Mr Justice Henri Mizzi presided.

Lawyers Julian Farrugia and Carina Bugeja Testa from the State Advocate's office appeared for the ARB chairman and the Police Commissioner.