A pensioner who used to sell animal feed has been charged with money laundering after allegedly depositing over €2 million in third-party cheques over a six-year span, cashing them to spare her customers a visit to the bank.

Carmela Borg, 67 of Qormi, was accused of money laundering, running an unlicensed banking service and making a false declaration to the Tax Commissioner.

She pleaded not guilty.

Evidently a newcomer to court, the woman sat quietly on the front seat before the magistrate as prosecuting Inspector Robert Azzopardi gave an overview of the investigations triggered by information that reached the police in February 2021.

He said that between 2014 and 2020 Borg had deposited into accounts at local banks, a total of 4,903 cheques which were written out to third parties.

The total value of those cheques was €2,095,410.

It turned out that Borg would cash cheques for customers while running her business from her home or her garage next door.

She would charge a commission which varied in amount but which investigators estimated to be, on average, €7.50 for each transaction.

Magistrate questions the role of the banks

Magistrate Donatella Frendo Dimech asked whether the banks had allowed this to go on for years and whether the banks had also been questioned in the course of police investigations.

“The banks assisted and facilitated this. Were they charged? We are saying that this woman did wrong. All well and good. But if we charge individuals for running an unlicensed banking activity, we must also ask what the banks did to facilitate this,” the magistrate argued.

“We cannot pick and choose.”  

“According to the Inspector’s testimony, the banks allowed the accused to deposit €2 million in cheques in the name of third parties. The court orders and would expect - in the light of article 2 of Chapter 373 [Prevention of Money Laundering Act] that even the banks which facilitated such behaviour should at least have been investigated,” minuted the court.

Continuing his testimony, the police inspector said that some 2,060 cheques, amounting to €1,243,951 were deposited at Bank of Valletta. 2,403 cheques amounting to €722,270 were deposited at HSBC.

The police had spoken to 33 individuals who confirmed that they used to purchase feed and other items from the accused, handing over cheques which she would cash against a commission.

When questioned in May, Borg opted for her right to silence.

“This was an old village practice…..She [the accused] would charge a couple of euros to spare them going to the bank. It all amounted to a few euros a year, yet she’s been charged as though she was the chief money launderer of Malta,” defence lawyer Jose’ Herrera argued.

Asked about the sum which the woman actually kept for herself out of those €2 million or so deposited, Inspector Azzopardi said that that amount was some €36,800.

Asked by defence lawyer Alex Scerri Herrera about the source of information which had triggered criminal investigations against Borg, the inspector did not reply, as the court pointed out that such information was confidential.

Prosecuting Inspector Tonjoe Farrugia also testified.

He explained that the accused had allegedly told one of her customers that she had a permit to cash cheques and that she had some sort of power of attorney.

Under interrogation, the pensioner had said that she used to run a shop in the past but today did not work.

Her former customers told police that they found her “handy” because she spared them queuing at the bank.

Request for assets freeze

The prosecution’s request for a freezing order over all assets of the accused was objected to by her lawyers.

They said that such an order ought to be limited to the amount of €36,800, namely the alleged profit she gained by cashing the cheques.

“There is no constitutional remedy to challenge this most draconian legislation in the country,” argued Herrera.

Whilst expressing doubt on the prima facie evidence regarding the money laundering charge, the court decreed that there was sufficient prima facie evidence with respect to the other charges and thus, that was to apply to all the charges.

The case continues.

AG lawyers Andrea Zammit and Rebekah Spiteri also prosecuted.

Lawyers Jose’ Herrera, Alex Scerri Herrera, Martina Herrera and Kristina Camilleri Deguara, are defence counsel.