A former notary convicted of misappropriating clients’ funds has had his punishment reduced on appeal, since he had been charged with the wrong offence. 

Pierre Falzon, 59, who voluntarily renounced his warrant in 2012, had landed a two-year jail term suspended for four years after being declared guilty of misappropriation by a Magistrates’ Court in April 2018.

Falzon was investigated by the police force’s Economic Crimes Unit following complaints by a number of his former clients, who had been contacted by tax authorities demanding payments still due. 

Those clients had handed over the necessary amounts in Duty on Documents and Capital Gains Tax to Falzon when signing causa mortis deeds following the death of their relatives.

Yet those monies had apparently never made it to the taxman.

At the time, Falzon had been away from Malta “for a long time,” later explaining how he had gone through hard times, accompanying his wife abroad for long spells of medical treatment whilst struggling with financial troubles, made worse by freezing orders and garnishees.

Upon his conviction, the former notary was hit by a general interdiction for life and was ordered to reimburse some €13,000 to the clients.

In their appeal, Falzon’s lawyers, Michael and Lucio Sciriha, argued primarily that the prosecution had failed to prove the alleged crime. 

Nor was it correct to state that the money had been misappropriated, the minute it was deposited into the notary’s accounts. The Commissioner of Inland Revenue did not accept private cheques and therefore the notary had to deposit them in his own account and then order bank drafts instead. 

Moreover, in spite of financial difficulties, Falzon had managed to register almost all contracts published and had paid €300,000 in tax, even if long after the stipulated time-limits.

In a lengthy judgment, the Court of Criminal Appeal, presided over by Mr Justice Aaron Bugeja, observed that the legislator had drawn a clear distinction between misappropriation by an ordinary person and the mishandling of funds committed by a public officer. 

Embezzlement, inspired by the crime of “peculato” under the Codice Per Lo Regno delle Due Sicilie, was attributed to public officers who, like the notary, ‘misapplied’ funds or any movables entrusted to them, thus “abusing and undermining the public trust inherent to the functions of their office.”

In this case, the prosecution had wrongly issued charges for misappropriation rather than embezzlement, the Court said, acquitting the appellant on that “defective” charge. 

However, what Falzon had done went beyond mere negligence or lack of professional ethics, since he had intentionally breached his duties, causing others “a very serious prejudice,” observed the Court.

As a notary public, Falzon was expected to exercise a higher degree of diligence than the average person, Mr Justice Bugeja went on, adding that “any honest practising notary knows that he ought not mix clients’ funds with his own or those of relatives or even some commercial enterprise.”

Falzon had deposited some of the money into his wife’s account and another attested to Elpirega Ltd, a building development and construction venture between the notary and his spouse. 

Moreover, once Falzon had become aware of freezing orders and garnishees in his regard, he should have refrained from continuing to publish deeds and to take money from his clients, knowing that he could not fulfil his obligations in terms of law. 

In the light of such considerations, the court partially confirmed the conviction, concluding that the appellant had failed in the functions of his office and had committed a wrong which he had been duty-bound to prevent. 

The court consequently reduced the punishment to a three-month jail term suspended for three years.

The lifelong interdiction and the €12,805 refund were confirmed. 

Lawyers Michael and Lucio Sciriha assisted the appellant.