A Sliema-based investment firm allegedly used by Venezuelan elites to launder millions in state funds has had its licence cancelled by the Malta Financial Services Authority (MFSA).
The financial watchdog said in a public notice this week that the licence was being withdrawn after a raft of breaches were found at Portmann Capital.
These included failure to act honestly, fairly and professionally in compliance with relevant requirements, inadequate risk management and failure to cooperate with the authority.
The cancellation of Portmann Capital’s licence is still subject to appeal and will only become operative once the appeal window expires.
In the interim, a December 2019 directive banning any outgoing transactions from Portmann will remain in place. The firm is similarly banned from taking on any new clients.
Estimated €500 million laundered
According to a 2018 criminal complaint filed in the courts of Miami by the US Department of Homeland Security, huge sums of money were syphoned from the country’s state oil company, Petroleos de Venezuela, in a complex money laundering scheme.
Around €500 million is believed to have been laundered via Portmann Capital in 2014 and 2015.
The conspiracy is alleged to involve the stepsons of embattled Venezuelan President Nicolas Maduro, who has himself faced accusations of looting the public coffers.
According to the criminal complaint filed in the United States, Portmann Capital was a willing accomplice in the money-laundering.
The US court documents allege that the Maltese firm received upwards of €20 million for laundering the money, which works out to be a four per cent service charge on the racket.
The MFSA hit a regulatory speedbump in 2020 after the financial services tribunal overturned a decision to suspend Portmann’s operations.
The tribunal instead gave the investment firm one year to improve its anti-money laundering controls.
With the year having elapsed, the MFSA has now proceeded with the cancellation of Portmann’s licence, having concluded that regulatory breaches continued.