A building contractor and a former clerk were remanded in custody on Wednesday after being accused in court of criminal association, making false declarations to the tax commissioner, money laundering and fraud running into several million euros. The crimes were allegedly committed between 2012 and this year.
Martin Farrugia, a contractor from Rabat, and Henriette Cassar, from Zebbuġ, who did not declare an occupation, were arraigned before Magistrate Gabriella Vella. Farrugia was also separately charged with defrauding a long list of clients.
Both accused pleaded not guilty.
Earlier, Times of Malta reported that five people had been arrested by the police as part of a €62 million tax and fraud investigation.
Prosecutors told the court that back in 2021 the police were informed by the VAT Department about suspected €4.2 million fraud by Farrugia. Investigations spread to other persons linked to him.
It was found that Cassar had deposited in her accounts some €960,000 in cheques linked to Farrugia's business activities but had not declared any income with the Commissioner for Inland Revenue. She also made some €150,000 in profits from her separate business related to memorabilia.
After hearing the not guilty pleas and confirming the legality of the arrests, the court upheld a request for a freezing order over all assets of the accused.
The prosecution objected to a request for bail in view of the serious nature of the charges, the fact that civilians still had to testify, and devices and documents seized in police searches still had to be analysed. It also pointed out that other people may be arraigned in connection to the case.
Defence lawyer Franco Debono, appearing for Cassar, rebutted that his client has an untainted record. She’s almost 50 and did not even have a contravention on her sheet, he said.
As for the claim that the accused faced “very serious charges” Debono said the charges against her were medium range in nature. All infringements were serious but when placed in context of all offences, money laundering was not most serious.
He said that the two cases were technically separate and he urged the court to deal with them separately. The alleged victim in her case was the Tax Commissioner and social security authorities. Furthermore the prosecution had not brought any evidence that if granted bail, Cassar would try to tamper with evidence.
The prosecution replied that Cassar was a clerk at the time of the alleged offences. The declarations with the tax department, fiscal VAT receipts, were filled in by her. That’s from where the €4.2 million discrepancy emerged.
Debono rebutted that as co-accused Cassar could not testify against Farrugia. And the prosecution had confirmed that in her case, the alleged victim was the tax commissioner.
The prosecution also objected to bail for Farrugia, saying he had allegedly committed fraud in respect of various civilians. They feared that they might not track him down. The address on his ID card was not where he was found. And there were administrative cases in his regard where he was proving difficult to notify for court proceedings.
His lawyer, Dominic Micallef, said that police should have all evidence against him wrapped up once they arraigned him. Were it otherwise they could have granted him police bail.
He also argued that the prosecution had not given proof of possible tampering.
“We cannot wait for the prosecution to summon all witnesses for the accused to get bail. He’s still presumed innocent and there’s no concrete evidence that he might tamper with witnesses,” he pleaded.
In dismissing the requests for bail the court observed that in the case against Cassar, although the injured party was the tax commissioner, there were other alleged victims who were civilians. So at this early stage of proceedings, the request for bail was being denied until witnesses testified. Bail was also being denied for Farrugia since the address on the charges was different from his actual one.
AG lawyer Abigail Caruana Vella and Inspector Joseph Xerri prosecuted. Lawyers Franco Debono and Francesca Zarb were counsel to Cassar and lawyer Dominic Micallef and Etienne Borg Ferrante appeared for Farrugia.
Lawyers Arthur Azzopardi, Jacob Magri and Stefano Filletti appeared parte civile for the victims.