A total of 25 Satabank clients initially suspected of criminal activity have walked away from the bank with €12.1 million after the police decided not to prosecute them.
According to a report compiled by EY, which was handed control of the bank by regulators in October 2018, the frozen funds were released after ‘investigation and attachment orders’ issued by the courts had expired, without any resultant prosecution.
The recently-released report says such orders were received for 54 Satabank customers, with 25 of those having since expired and their funds released by the bank.
These orders are issued upon a request by the police and Attorney General when a person is suspected to be involved in financial crime or another underlying offence.
An investigation order equips the police with the ability to demand all the necessary files and documents on a suspect, whereas the attachment order effectively freezes the suspect’s assets for a 45-day period, which can be extended by another 45 days.
Finance Minister Edward Scicluna has called for the setting up of a dedicated financial crime agency to break the police’s “monopoly” on prosecutions.
A report by Monevyal, a Council of Europe anti-money laundering body, identified the police as the weakest link in Malta’s battle against financial crime, putting the country at risk of being greylisted by the Financial Action Task Force, an international watchdog on anti-money laundering compliance.
Police and Attorney General may have been trigger happy with the attachment orders
One source speaking to Times of Malta raised the possibility that the police and Attorney General may have been “trigger happy” with the attachment orders, given the pressure to deliver more results in light of the dismal Moneyval assessment.
Regulators took the drastic action of handing control of Satabank to EY after inspections at the bank found lax anti-money laundering controls at the bank.
By the following year, investigation and attachment orders for 54 customers had been received from the courts.
The balance associated with customers for which these orders were received amounted to around €40 million, and the amount transacted through the bank by these clients since opening accounts there amounted to a staggering €1.05 billion.
As of the end of February, EY had identified 570 suspicious transactions involving 999 Satabank customers. EY said the suspicious transaction reports totalled €188.5 million, with the account holders having sent and received €9.3 billion since opening accounts with the bank.
The suspicious transaction reports are sent to the FIAU, which analyses them and passes on their own report to the police if the suspicions are warranted.
Satabank is contesting an FIAU fine of over €3 million for breaches in its anti-money laundering compliance standards.
The report compiled by EY gives insight into the composition of Satabank’s clients.
Of the just under 74,000 customers, 67,000 were linked to two e-money platforms founded by the bank’s co-owner Christo Georgiev.
Upon taking control of the bank, EY set about a forensic data collection and preservation process. It had also taken steps to restrict access to systems, e-mails and internet for bank personnel, as well as restricting physical access to the St Julian’s premises to bank staff outside of working hours.
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