Progress Press managing director Michel Rizzo and former financial controller Claude Licari have been charged with fraud and money laundering.
They were also charged with making fraudulent gains to the detriment of Malta Enterprise between 2013 and 2019, criminal conspiracy, making a false declaration and falsification of a public document.
The charges are related to a Malta Enterprise funding application, a court heard on Thursday. Licari, who left Progress Press “long ago” is also charged with breaching accountancy laws.
As well as Rizzo, Licari, the company Progress Press, which is the printing arm of Allied Group, faces similar charges.
Defence lawyers for Rizzo, Licari and Progress Press said the charges are being "strongly contested". Lawyer Joe Giglio told the court there was "no evidence" that Rizzo took any funds and said his financial profile is "impeccable". The police said they were satisfied with the explanations given as well as Rizzo's financial profile.
Both men were granted bail against a deposit of €20,000 and a personal guarantee of €50,000 and have been ordered not to approach the offices of Progress Press, the airport, coast or any seacraft.
A court order has also frozen the assets of Progress Press.
Licari was represented by lawyer Roberto Montalto. Inspectors Anne Marie Xuereb, Joseph Xerri, Ian Camilleri, and Lianne Bonello prosecuted together with AG lawyers Antoine Agius Bonnici, Andrea Zammit and Sean Xerri de Caro.
Allegations date between 2013 and March 2019 but the details revealed in court were sparse.
The arraignments follow previous charges filed against several people last month, including former Allied Group managing director Vincent Buhagiar and former chief of staff of the prime minister Keith Schembri.
Police have also launched extradition proceedings for Rizzo's predecessor Adrian Hillman, currently in the UK.
Last month, a court heard claims Schembri paid around US$5.5 million in backhanders to Buhagiar and Hillman as part of a multi-million euro deal to purchase printing machines from his company Kasco.
LIVE BLOG
Sitting ends
4.22pm The sitting has ended for today. We'll have a short summary above in a few minutes.
Administrator to run company
4.16pm The Attorney General lawyer points out that they want an administrator to manage Progress Press. Defence lawyer Giglio asks for some time for the company board to meet to tackle this matter.
The parties agree to this. So an administrator will be decided upon at a later stage.
Bail conditions continued
4.14pm Both men also:
- cannot approach prosecution witnesses
- must sign bail book twice weekly
- abide by a curfew from 11pm - 6am
- must not go to company offices
- must deposit €20,000 and a have a personal guarantee of €50,000
Bail conditions
4.08pm The magistrate begins to outline bail conditions. Rizzo must appear in court and keep 100 metres away from the shoreline or the airport.
There's a problem: Rizzo points out that he lives 50 metres from the shore. The court takes note. Instead he is ordered not to approach any sea craft.
Bail granted
4.07pm The two men have been granted bail.
Freezing order upheld against Progress Press
4.05pm The magistrates reject freezing orders for Rizzo and Licari personally. But upholds the request for a freezing order for all assets of Progress Press.
Court deliberates
3.50pm We are waiting for the court to make a decision on bail.
Bail is 'rule not exception'
3.33pm Licari's lawyer, Roberto Montalto demands to know what proof there is that Licari would tamper with evidence. "The prosecution has not answered this yet!"
Rizzo's lawyer Giglio adds that the people mentioned as witnesses are "indispensable for us to prove our innocence" and asks if they should be the cause for the two men to remain in custody.
"And bail is the rule, not the exception!" he adds.
Risk of tainted evidence
3.31pm The Attorney General lawyer rebuts: the witnesses have to testify in court personally to explain the prosecution case.
He says that bail could result in evidence being tainted.
Lawyer argues for bail
3.24pm Lawyer Joe Giglio is making submissions for bail for Rizzo. Referring to witnesses to be called, he demands to know who they are. He says the witnesses are people "we ourselves" asked police to call to speak to. Other witnesses are employees at Progress Press. He says the magisterial inquiry dated back to 2008 - "Is there real fear of tampering?"
Objection to bail
3.15pm AG lawyer Antoine Agius Bonnici argues that at such an early stage of the proceedings, there were many civilian witnesses to testify, including company employees and, witnesses at Malta Enterprise and there was real fear of tampering with evidence.
The magistrate asks the prosecution to give an idea of the amounts involved.
"I’d rather give throughout the case, at a later stage. But at this stage we are objecting to bail. Yes, the accused cooperated always. But before they were not under arrest. So the fear of tampering is greater now. We are objecting at this stage until those witnesses testify."
Questions over assets freeze
3.15pm Licari's lawyer is asking why the police made a request to freeze his assets today.
"His patrimony is legitimate and justified. This has been confirmed under oath. He made no unlawful gains. So why cause him such suffering today? The police have said that the accused have done nothing illicit but insist on freezing their assets nonetheless."
The AG's lawyer says that the purpose of this order is to safeguard assets, in case any kickbacks come to light at a later stage.
"There is evidence of wrongdoing vis-a-vis the company. We will ask for appointment of administrator for that purpose," the lawyer adds.
But Giglio hits back: "You cannot come here and play with people’s lives in this way? They’ve been under investigation for long weeks and no attachment order was issued."
Montalto steps in: "Coming here, asking for freezing order and saying “then we’ll see what happens later” is no go!"
The AG lawyer replies: "We're not here to cause suffering to people. It's just to protect assets."
'Nothing to censor'
3.10pm Lianne Bonello from the FCID takes the oath. She was present for all statements, and analysed Rizzo's financial profile. Just some €4,500 were in doubt at one time but that was acceptable.
Police were satisfied with explanations given and his financial profile. The same goes for Licari.
Giglio says that today the court has further proof that all assets of accused were sufficiently explained and that there was nothing to censor.
"Police investigated his accounts and there was a negative outcome. So there should be no freezing order in his personal capacity."
Licari's lawyer adds that any query by the police was immediately answered.
'No evidence MD took funds'
3pm Giglio said the police have confirmed that Rizzo was arraigned on behalf of the company. "So why should freezing order be issued in his personal capacity? He was not investigated personally," he says.
The AG lawyer rebuts. The freezing order is being requested against them personally and the company - this is to protect the judicial process.
Giglio hits back: "There was and will be no evidence that Rizzo had perceived any personal gains. There will be no vicarious liability. I can state that, although it will be proved later. On the contrary, his financial profile is impeccable."
As for Licari, his lawyer Roberto Montalto pointed out that the man’s employment history showed how he had worked his way up to the post of former CFO at the company.
“There is not the least shadow of doubt about his assets. His patrimony is legitimate and justified,” and besides he was not “decision maker” in his former company role.
All documents requested were supplied
2.50pm Giglio wants someone from the prosecution to testify. He asks inspector Anne Marie Xuereb to take the stand.
Rizzo, the court hears, was acting as director of Progress Press and had signed the letter of intent in his capacity of director.
The inspector confirms that Rizzo always attended meetings, supplied all documents requested "over and above what was requested" and there was no evidence that he tried to tamper any evidence.
“I can confirm that all persons kept to police appointments and always cooperated.”
The same applies to Licari, who stopped working at Progress Press years ago.
Freezing order request
2.40pm The Attorney General asks for an attachment and freezing order. The lawyers of the defence object to this. The case was sparked by inquiry of a magistrate who had instructed investigations against Progress directors.
It was in connection with a grant.
'Strongly contested' charges
2.35pm Defence lawyer Joe Giglio says the charges are being "strongly contested". The prosecution informs the court that there will be some changes to the charges.
They are facing charges of fraud, conspiracy, false declaration and money laundering. Licari is facing a breach of accountancy laws. The issue related to a Malta Enterprise fund.
"Definitely not guilty," Rizzo replies on behalf of the company.
Licari also pleads not guilty.