A contractor who stands accused of involvement in a €500,000 road works scam had told the police that it was Transport Malta architect Gordon Zammit who came up with the idea, a police inspector told a court today.

Police Inspector Angelo Gafa' testified in two separate compilations of evidence against  35-year-old  Gordon Zammit and, in the second case, against 49-year-old George-Oliver Schembri, from Birżebbuġa, a director of Alfred Schembri and Sons Ltd and Donald Camilleri, his accounts clerk.

Inspector Gafa' said the police investigation began when Police Inspector Fabian Fleri received confidential information in August last year alleging corruption and fraud between Alfred Schembri and Sons Ltd and Architect Zammit.

This information alleged that the contractor, in agreement with persons in Transport Malta, was inflating bills of quanities and the money then used to be shared.

The same sources suggested that the police should cross check the original documents from Alfred Schembri and Sons with those of Transport Malta on specific projects.

As a result, on February 18 the police simultaneously arrested four people from the company and three from Transport Malta. They searched their offices and their computers.

The Chief Officer of the Roads Directorate, Simon Grima, gave the police 107 files pertaining to works carried out by the company.

During a search at the architect's home in Tower Road, Siema, the police seized 254 documents including original bills of quantities issued by Alfred Schembri and Sons Ltd.

The cross-checking exercise by the police found 29 of the files were in the name of Gordon Zammit while the rest involved work by other TM architects.

Of these 29, discrepancies were found in 24 instances. In the other files the bills issued by the company and what was actually paid by Transport Malta either tallied, or else TM actually paid less.

The total discrepancies amounted to €503,519.76.

The smallest discrepancy amounted to €1,196 while the largest - for the construction of Triq Barumbara in Zabbar - amounted to €63,909. In this case, the company issued a bill of quantities of €43,698 but the bill certified by the Transport Malta architect was inflated to €107,607.

During the investigation Mr Schembri and Mr Camilleri had immediately admitted to the police to having been part of this fraudulent scheme for the past two years and also explained how it used to work. 

It was explained how, before splitting the difference between the actual bill and the inflated one, the three used to deduct 18% VAT and 35% tax. Zammit used to be paid in cash while the rest of the money used to go to the company's accounts.

The last time that architect Zammit was paid in cash was November last year.

Inspector Gafa' said that during the investigation it resulted that the company initially used to provide the cash to architect Zammit through 'pay self' cheques but the bank, HSBC, complained.

It was then that Godfrey Cutajar, who owns a scrap metal company (and has admitted his involvement and is awaiting judgement) issued five fictitious invoices between May 2010 and November 2011. Alfred Schembri and Sons used to pay him for these invoices and he returned the money in cash.

It resulted that Mr Cutajar did not known know why he was being asked to issue these false invoices and did not question it. He also told the police that he got nothing out of it. He had explained that he was Mr Schembri's relative and at the time was moving premises and felt obliged to Mr Schembri because he was storing some equipment for him.

Police investigations revealed that Architect Zammit received more than €90,000 in cash from Mr Schembri. The biggest amount was the last payment, in November, of €39,000 in cash.

Mr Schembri had told the police that it was Mr Zammit who had come up with the idea of this fraudulent scheme.

The inspector gave another two examples of inflated invoices, where a bill for a  €32,444 project was inflated to €62,274 and another costing €47,370 was inflated to €70,473.

Architect Zammit released an eight-page statement to the police in which he denied that Transport Malta required bills of quantities from contractors. When he was asked to explain the discrepancies in the bills, he said there were reasons, but he said he would only divulge them at the appropriate time.

Inspector Gafa' said that in one of the documents found in the architect's house was an original bill issued by the company with the new inflated figure written in pencil and, at the bottom of the page, workings in sequence on how the amount was reached (after tax deductions). The pencilled figure was then found in other evidence.

Asked to explain what the original bills were doing in his house, he said they were 'rough paper'

Inspector Gafa gave his evidence in the presence of Mr Zammit's parents and his distraught pregnant wife.

During the second compilation of evidence, Inspector Gafa' repeated the details.

It also resulted that the company's account clerk, Donald Camilleri, who spent most of the sitting crying, had been with the company for 17 years. He had cooperated fully with the police.

Under cross examination, Inspector Gafa said the police are not accusing Mr Camilleri of pocketing any money, but of being part of the scheme.

During this morning's sitting, Transport Malta Architect, Daniel Cordina, who had been arrested but released without charge, opted not to testify in court so as not to incriminate himself.

At the end of the sitting,  Mr Schembri and Mr Camilleri were granted bail against a deposit of €1,000 each and a personal guarantee of €5,000 each. Mr Zammit's request for bail will be decided in another sitting.


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