A building contractor accused of evading millions in tax owned dozens of exotic animals including tigers and lions as well as luxury cars including two Lamborghinis, a court heard on Tuesday.
Details of those assets emerged in court at Martin Farrugia’s first court hearing.
The Rabat-based contractor is pleading not guilty to criminal association, making false declarations to the tax commissioner, money laundering and fraud dating back a decade. He has spent the past two weeks in jail after a court denied him bail after he was arraigned.
Farrugia is facing charges alongside Henriette Cassar, from Zebbug, registered as his full-time administrative clerk. Both were escorted back to court on Monday when the compilation of evidence kicked off.
Inspector Joseph Xerri told the court that suspicions about Farrugia were flagged by the VAT department.
A number of clients had made claims for refunds on capital investments and the common denominator in those claims were invoices issued by Farrugia.
Police stepped in and reviewed a number of claims.
They finally identified 44 of Farrugia’s clients and summoned them for questioning. They also carried out inspections at various properties to confirm that the works had actually been done.
The main subject was Farrugia, a Maltese contractor living at Rabat with other properties at Siġġiewi and Mellieħa. He was married, had three children and had fathered three other children with his partner.
Farrrugia was registered for VAT purposes since January 2014.
When police checked manual fiscal receipts linked to the suspected fraud, various discrepancies came to light, explained Xerri.
For example, a receipt Farrugia issued to a client showed an amount of €70, 210 (grey receipt) whereas the book copy (yellow receipt) showed the amount as €702.10.
The handwriting on the customer and book copy was different.
The surname of one of the clients also did not match and the VAT number was missing in the book copy.
Although the papers in the VAT receipt book were carbonized, other details in the two kinds of receipts also varied.
For instance, one receipt was for “works carried out” while the corresponding book copy said it was for “finishings.”
The inspector then delved into a breakdown of the claims made by each of the clients at the VAT department, the actual value of the investment and the suspected fraud, supporting each case with photographic evidence gathered during the inspections carried out to confirm the works.
Most of the works concerned excavation and building works at farms in various localities, with the construction of manure pits, cow sheds, garages and paving, stalls and storerooms.
Most payments were effected in cash, with clients telling police that Farrugia would “insist on cash” and was “not too happy with cheques.”
In certain cases, Farrugia had engaged third parties to carry out the works.
One client said that he sometimes witnessed Farrugia paying workers on site and in cash.
Among the clients questioned by police was a woman who used to run a beauty shop at Qormi as well as the operator of a boutique hotel in Valletta who had engaged Farrugia to rebuild the property.
During his testimony, Xerri also listed a number of exotic animals owned by Farrugia.
The list included seven lions, six tigers, eight pumas, two leopards, two black leopards and sixteen horses found at Farrugia’s farms in the limits of Rabat and Siġġiewi.
Farrugia had allegedly told police that he had to spend some €1000 a week to feed his exotic pets and was currently limiting their food supply to white meat.
Among Farrugia’s assets was also a fleet of luxurious vehicles including two Lamborghinis, two Porsche models, a Maserati, three Mercedes and two Land Rovers.
During Farrugia's arraignment, prosecutors told the court that they suspected Farrugia had defrauded the taxman of €4.2 million. Cassar became a suspect when investigators noted that she had deposited some €960,000 in cheques linked to Farrugia's business activities in her accounts, but had not declared any income with the Commissioner for Inland Revenue.
The case, presided over by Magistrate Leonard Caruana, continues.
AG lawyer Abigail Caruana Vella prosecuted, together with Inspector Joseph Xerri.Lawyers Etienne Borg Ferrante and Dominic Micallef are counsel to Farrugia. Lawyers Franco Debono and Francesca Zarb are counsel to Cassar. Lawyers Stefano Filletti, Arthur Azzopardi, Jacob Magri, Rebecca Mercieca and Noel Bianco appeared parte civile for various victims.