Two months before his arrest as a suspect accomplice in Daphne Caruana Galizia’s murder, Yorgen Fenech had an almost hour-long phone chat with former Malta Gaming Authority CEO Heathcliff Farrugia voicing disappointment about a compliance review at his casinos.
Details about that communication and the criminal repercussions it triggered for Farrugia emerged in court when the former CEO faced charges for allegedly divulging commercially sensitive information during his chat.
Investigators zoomed in on the September 2019 chat when sifting through the voluminous data extracted by Europol from Fenech’s mobile phone seized two months later when the business magnate was arrested on board his yacht.
Inspector George Frendo, a former member of the Economic Crimes Squad, testified how he was tasked with examining a number of chats extracted from Fenech’s phone, including the one with Farrugia on September 23, 2019.
The former CEO at Tumas Gaming, operator of the Portomaso and Oracle casinos, had voiced disappointment over the fact that his gaming parlours had been targeted for a compliance review by the Financial Intelligence Analysis Unit.
Fenech’s concern was not so much about the consequent fine as the negative repercussions that such review could spell for his organisation. Farrugia tried to ‘console’ Fenech by telling him such reviews were not public and reassured him that he was “trying to buy time”.
He went on to tell Fenech that a rival organisation in the gaming sector was also targeted for inspection, seeking to reassure the businessman it was “nothing personal” but simply because of the looming Moneyval report.
He went on to tell Fenech that a rival organisation in the gaming sector was also targeted for inspection, seeking to reassure the businessman it was ‘nothing personal’ but simply because of the looming Moneyval report
On the basis of that conversation discovered on Fenech’s phone, the police obtained a magisterial search and arrest warrant against Farrugia on August 14, 2020. The search continued at Farrugia’s work office at Smart City where his laptop was also confiscated, before the MGA official was escorted to police quarters.
Confronted about his chat with the businessman, Farrugia denied any involvement in the review concerning Fenech’s rival gaming operator and insisted he simply sought to “calm him down”.
But data that emerged later from Farrugia’s work e-mail correspondence appeared to indicate otherwise. An e-mail dated July 26, 2019, was sent by FIAU to MGA flagging a list of organisations targeted for review.
On August 6, the head of compliance and anti-money laundering at MGA e-mailed the former CEO Farrugia information about those listed organisations that were to face money laundering investigations.
Asked by Magistrate Ian Farrugia whether a time frame was set for inspections, Rudolph Muscat from the FIAU said that although that could happen in certain cases, it did not appear to have been so in this particular case.
The list of entities was not public, but a subject person would generally be informed some three weeks ahead of the upcoming inspection, allowing time for the organisation to hand over relative documentation for the FIAU to go through ahead of the examination.
In case of land-based casinos, the notice could be given some four weeks ahead rather than three in view of the more extensive scope of the investigation, explained the witness, adding that, however, such notification did not necessarily take place.
The case continues.
Inspector George Frendo prosecuted. Lawyer Ezekiel Psaila is defence counsel.