There were “absolutely no reasons” for two former Progress Press officials to answer personally to charges of fraud and money laundering allegedly committed by the company, their lawyers argued in court on Thursday. 

Former managing director Michel Rizzo and former financial controller Claude Licari were back in court in the ongoing compilation of evidence wherein they are pleading not guilty, both personally as well as in their capacity as company officials at the time when the alleged fraud stemmed from a Malta Enterprise funding application, dated 2013.

Yet, the charges presented three scenarios which had to be clearly distinguished, lawyer Joe Giglio said, when making submissions as whether his clients, Rizzo and Progress Press Ltd, had a case to answer. 

When reaching its decision, the court had to distinguish between Rizzo’s personal criminal liability, his liability vicariously, as a company official as well as the corporate criminal responsibility of Progress Press itself.

Other members of the judiciary who have played different roles in these criminal proceedings so far, appear to have acknowledged this “fundamental” distinction, said Giglio, “and unless this is made clear, there will be mistakes”.

Magistrate Josette Demicoli, first tasked with handling the in genere inquiry, had issued instructions for further investigation against Adrian Hillman “in his personal capacity,” whereas Rizzo and Licari were referred to as “company officials”.

Moreover, it had been excluded that Rizzo had testified falsely at the inquiry, his lawyer noted. 

When Rizzo and Licari were finally arraigned in April, duty magistrate Charmaine Galea likewise drew the distinction, by turning down the prosecution’s request for a freezing order against both accused in their personal capacity, while upholding it against Progress Press Ltd. 

That position appears to have been confirmed by Judge Edwina Grima, presiding over the Criminal Court, who also refrained from issuing a temporary freezing order against the officials when turning down a request by the AG to overturn the magistrate’s decision. 

Documents signed were in Rizzo's duties as company official

During a previous sitting, one of the prosecuting inspectors had explained that action had been taken against Rizzo personally because “there was some form of financial gain,” adding that “he received a pay.”

“God forbid is a person is charged with money laundering just because he receives a wage! This is bad law!” Giglio exclaimed, noting further that the FS3 statements presented by Rizzo himself on Thursday under oath, clearly indicated he was paid by Allied Newspapers Ltd and not Progress Press. 

There were no sufficient reasons for Rizzo to face trial under indictment in his personal capacity, said his lawyer, stressing that any documents or emails signed by Rizzo were in the course of his duties as company official. 

As for Progress Press itself, the charges it faced were liable to punishment consisting in a fine and thus subject to a two-year term of prescription. 

This meant that when Progress Press Ltd ended up in court in April, the charges were time-barred and hence there was no case to answer in terms of corporate criminal responsibility, Giglio argued, winding up his submissions.

As for Licari, there was no element of fraud, nor that he knew about the over-inflated costs and commissions, nor had he received any commissions or knew of commissions paid to others, argued his lawyer Roberto Montalto.

All that was excluded by the prosecuting inspector when questioned under oath.

“If the prosecution itself said that Claude Licari knew of no fraud, how can he be guilty of fraud?” and once that underlying crime was missing, how could there be liability for money laundering, argued Montalto. 

“There were others who stole and committed crimes. It was definitely not us,” the lawyer declared. 

As for allegedly breaching the laws of his profession, the prosecution had not proved any dishonest conduct by Licari nor even basic proof relating to his accountant’s warrant. 

Magistrate to give decree next week

AG lawyer Antoine Agius Bonnici, on the other hand, argued that documentary evidence showed that both Rizzo and Licari knew “what was going on” as their names featured in correspondence and documents relating to the Malta Enterprise grant. 

And as persons in high office within the company, they were involved in the internal “manoevres” taking place and were “very instrumental” in committing the alleged fraud.

These submissions brought proceedings to a crucial stage when the court, presided over by magistrate Natasha Galea Sciberras, is to decree as to whether there is a case to answer by all or any of the accused. 

Earlier in Thursday’s four-hour long sitting, the court also heard testimony of Stefania Cilia Caligari, former accounts clerk at Progress Press, who explained that while items like ink, parts and chemicals for machinery qualified as consumables, paper was “something else.”

Prosecuting Inspector Joseph Xerri further expanded upon that classification of ‘paper’ when testifying at length about his role in the investigations, saying paper was not part of the original supplies that went with the machine. 

Xerri also made reference to a document, described as a “blueprint” containing details about the credit notes to be issued by Kasco to Progress Press and the commissions to be paid. The investment was of €5.5 million plus VAT.

Given its PDF format, investigators could not decipher who had created that document, Xerri explained, adding that police had found that “blueprint” at Kasco.

“That’s the fraud going on behind Progress Press’ back!” Giglio promptly exclaimed.

“And that's the reason why proceedings were filed yesterday on behalf of Progress Press.”

A decree is expected next week.