A Syrian man arrested following a magisterial inquiry into reports of terrorism-related activity in Malta transferred some €2.5 million to 13 countries in two years, an investigation has revealed.
A money laundering inspector testified that the transfers were multi-national, including Australia, Belgium, Iraq, Syria and the United Arab Emirates.
He was testifying against the 35-year-old plasterer Ebrahem Ahmad who stands accused of money laundering, operating an illegal banking service operation and involvement in a criminal organisation. He is pleading not guilty.
The officer's investigation revealed that Ahmad had allegedly been offering banking services without a licence.
The Financial Crimes Investigation Department inspector testified before Magistrate Donatella Frendo Dimech. He said investigations began around mid-April this year when the FCID was asked to assist the antiterrorism squad in an investigation into a group that was spreading pro-ISIS material.
Seven men were subsequently charged with terrorism-related offences.
Hawala transfers
The inspector – whose name cannot be published by court order - said the defendant was known as “the banker,” and would use the hawala money transfer system to pay for travel and other goods and services.
According to the International Monetary Fund, hawala is an informal system of transferring money around the world. Along with its traditional role of transferring money between individuals and families, often in different countries, it is also linked with financing illegal and terrorist activities.
The inspector said Ahmad did not have any bank accounts in Malta. However, he was registered with the VAT and Inland Revenue departments as a self-employed plasterer. He had also been given a Maltese social security number, but had never received any social benefits, said the inspector.
The inspector explained that during an anti-terror raid, the police had to force open the front door to the apartment in question, finding three men, two women and four children inside - all relatives of Ahmad.
Men accused of terrorism used his services
While searching the apartment, the inspector looked out of a bathroom window into the shaft and noticed an object that appeared to be a mobile phone at the bottom. It was retrieved and found to have a picture of the defendant’s youngest son on the lock screen.
“At first he tried to justify his financial dealings by claiming that he would help the local Syrian community in dealing with banks in Turkey but he later admitted to using hawala to transfer money to a relative in Syria and another man on the Turkey-Syria border,” the inspector said.
Data recovered from his mobile phone showed that the men who were currently accused of terrorism offences had used his services to send money to their families in Syria.
The device also contained receipts from overseas companies that are involved in money transfers, involving 13 different countries, which include Australia, Belgium, Iraq, Syria and the United Arab Emirates.
“In two years he transferred a total of around €2.5 million. He would charge between three and 10 per cent commission on the money transferred,” said the inspector, explaining that the amounts transferred were also reflected in chat records with his overseas contact in Syria.
The head of MFSA’s banking sector, Anthony Sacco, told the court that Ahmad had no licence to operate a banking operation in Malta.
He was asked at which point would transferring of funds be considered a banking operation, but the witness could not reply.
“Can a person receive a sum of money, travel to another country and pass it on to a third party?” defence counsel Nicholas Mifsud and legal procurator Colin Galea asked.
“If used legitimately he can,” replied the witness, who went on to explain that a banking licence “means you can accept deposits and lend money.”
“Is hawala banking an accepted banking practice? Would you need a banking licence for it?” Magistrate Donatella Frendo Dimech asked the witness, who replied that he had never heard of it.
Terrorism case recusal
When the case against another two Syrian men charged with possession and dissemination of terrorism-related material was called, Magistrate Frendo Dimech recused herself after it was pointed out that she had also led the magisterial inquiry against other men facing similar charges and who are appearing before a different magistrate, which inquiry was presented also in these proceedings.
Farhan Mohammed Sheikh and Abdulla Aliwi are pleading not guilty.
“It’s very obvious that this case shouldn’t have come before me,” the magistrate remarked, rebuking the prosecution for not pointing out this issue as soon as it was informed that she had been assigned the compilation of evidence.
Lawyers Antoine Agius Bonnici, Francesco Refalo and Rebekah Spiteri from the Office of the Attorney General are prosecuting, assisted by. Lawyers Jose’ Herrera and Franco Debono assisted the defendants.