Four charged with money laundering

A court heard a detailed account of a money laundering operation whereby over £1.3 million (about Lm900,000) was transferred from Italy into Maltese bank accounts, changed into two bank drafts and distributed through a brokerage.

Police Superintendent Alexandra Mamo gave a thorough description of investigations throughout a five-year magisterial inquiry that ended with a woman and three men being charged with money laundering yesterday.

The woman is a secretary and a representative of several companies and the three co-defendants are a company director, a former bank branch manager and a brokerage director.

They are all Maltese but Magistrate Lawrence Quintano banned publication of their names.

Superintendent Mamo explained how, in 2001, the Italian authorities had officially written to the Maltese authorities asking for their help in the investigation of, what they called, "the Carousel fraud case".

The Italian authorities listed a number of Maltese companies they believed may have been involved in the fraud.

Following a request by the Attorney General, in August 2001, the Maltese courts issued an order allowing the investigation of the companies listed in the letter and the seizure of any relevant documents.

The investigations showed that there were money laundering activities going on and, on October 18, 2001, a magisterial inquiry was opened, the superintendent said.

The superintendent added that during the inquiry, the police spoke to several people connected to the companies listed.

Meanwhile, the Italian authorities informed the Maltese courts that money had been transferred from Italy to company accounts in local bank A. When an international bank took over bank A, the money was moved to another local bank B.

After some time this local bank (B) suspected that suspicious transactions were taking place and informed the court about this in a report exhibited during the inquiry.

Superintendent Mamo went on to explain how police investigations focused on two bank drafts - one for £411,740 (about Lm269,480) and the other for £959,530 (about Lm629,380).

In the case of the first bank draft, investigations revealed that the money had been transferred from Italy into the account of a Maltese company in bank B. After some time, a transaction had been made to move the money into another local bank C, but the latter bank had refused the transaction.

However, the money was not deposited back into the company account from which it had been withdrawn. Instead, bank B issued a bank draft in the name of the same company.

The £959,530 bank draft had been issued in a similar way, also by bank B.

The police also learnt that the bank drafts had been issued from a bank B branch when the branch was being managed by one of the accused. The bank branch manager eventually resigned following internal investigations on other irregularities on his part.

Eventually, both bank drafts were deposited in a company account held at a local brokerage, of which one of the accused was a director. From there, a substantial amount of money was transferred to the same company's account in another bank D while some money was transferred to other companies or individuals.

Superintendent Mamo added that the bank transactions were made by one of the accused (the male company director) on the instructions of the woman accused and another woman.

Based on this information, the superintendent said, the police instituted criminal action against the four accused.

Names of banks and companies are not being published as they may throw light on the identity of the accused, which the court has decreed should not be divulged.

Police Inspector Antonovich Muscat is prosecuting.

Lawyers Joseph Giglio, Martin Fenech, Robert Abela and Emmanuel Mallia are appearing for the accused.