A director and employee of a tobacco wholesale company were each handed a suspended jail term and total fine close to €26 million after they were found guilty of tax evasion. 

Keith Attard, 55, and Marvin McKay, 45, were targeted by criminal prosecution as accomplices in defrauding the State coffers by abusing a duty suspension scheme whereby excise duty and tax were not paid by the wholesaler immediately upon delivery of the tobacco products. 

Irregularities came to light when customs officials noted that K&L Attard Co. Ltd, had not forked out excise duty and tax for cigarettes purchased over a nine-month period between March and December 2007. 

“Gross discrepancy” between the amounts and value declared and those actually paid up soon put customs authorities on the trail of the suspected foul play.

A search at the company offices and warehouses proved that the stocks were far less than those declared as having been purchased from the four local tobacco importers.

Further checks of the internal administrative accompany documents (IAAD), copies of which were kept by the supplier, the wholesaler and customs department, were mostly made out under the signature of McKay, and bore the company stamp. 

The police economic crimes unit was called in and charges were issued against Attard, as company director and one of his employees, McKay. 

On the basis of all evidence put forward the court, presided over by magistrate Ian Farrugia, concluded that the duo “had knowingly cooperated to evade tax. The accused knew what they were doing and the evidence showed that they effectively intended to do what they did”.

Whilst clearing them of misappropriation, the court declared them guilty of fraud, condemning each to a 15-month jail term suspended for three years.

Attard was fined €13,025,538 while McKay was fined €12,719,865. One-fourth of each fine is payable immediately as a civil debt owed to the Director of Customs. 

Meanwhile, another co-accused and former director of the company, had passed away pending proceedings. 

The court ordered a copy of the judgment to be delivered to the Registrar of the Civil Courts, the Inland Revenue Commissioner, the Customs Director and the Asset Recovery Bureau. 

Police assistant commissioner Ian Abdilla prosecuted.