Updated at 1.45pm with PD statement
A London-based prostitution racket and the alleged involvement of Opposition leader Adrian Delia are part of an ongoing money-laundering investigation by the police, The Sunday Times of Malta has learnt.
Police sources have confirmed that an intelligence report compiled by the Financial Intelligence Analysis Unit was handed over to them in March.
The report recommended a criminal investigation into the possible laundering of funds for the Maltese owners of two Soho brothels.
This information was received by The Sunday Times of Malta more than two weeks ago and a verification process has been ongoing since then. It is possible that the Maltese FIAU were tipped off about the case by their UK counterparts, but this could not be verified by the time of writing.
Contacted on Saturday, Dr Delia said he had no idea whether there was a police investigation into the alleged prostitution racket or into allegations that he had in any way been involved in any wrongdoing.
“I find it bizarre that I have not been contacted if an investigation has been ongoing for so many months,” he said, adding that his only involvement in this matter was as a lawyer to a client whose name had been mentioned.
The allegations against Dr Delia had first been reported by the late journalist Daphne Caruana Galizia, about two months before she was killed in a car bomb explosion outside her Bidnija home.
The issue dates back to 2004, when a Barclays International account in Jersey held in Dr Delia’s name was reportedly used to process the payments of rents for the London properties.
Ms Caruana Galizia reported on the alleged racket in detail in the weeks preceding her death, at a time when Dr Delia was campaigning to take over the leadership of the Nationalist Party.
She claimed that the ‘rent’ payments received into Dr Delia’s account were in fact a cover for illicit earnings from prostitution.
The funds are believed to have been transferred on behalf of a Maltese associate of Dr Delia, Emmanuel Bajada.
The alleged money laundering could have been in excess of €1 million
Back in 2009, Mr Bajada, today 64 years old, had admitted in court to laundering the proceeds of prostitution.
The court had found that Mr Bajada, known as ‘Lolly’, was involved in the running of two properties used for prostitution, Adams Guest House in St Julian’s and Pace’s Guest House in Sliema. He was handed a two-year jail term suspended for four years and fined €50,000.
Mr Bajada, however, did not own the London properties from which the prostitution racket allegedly operated.
Police sources said it was believed that he had in fact been working for his brother, Eucharist, who, concealed behind a web of offshore companies, was the real owner of the alleged brothels.
Emmanuel Bajada is meanwhile suspected to have acted as the collector of the prostitutes’ takings from the properties owned by his brother and depositing them, via his wife Eve, into the Jersey bank account held in Dr Delia’s name.
Ms Caruana Galizia reported on her blog Running Commentary that an HSBC bank transfer advice slip showed how money was passed on to Dr Delia’s Jersey account from Ms Bajada.
Court evidence from a London trial of prostitution racketeers, operating out of the same Soho addresses, also included a notebook detailing large sums of money “collected by Eve”.
Ms Caruana Galizia reported that the money was destined to be moved to bank accounts linked to Mr Bajada’s offshore companies incorporated in the Marshall Islands, in a deliberate financial concealing exercise that money laundering investigators often refer to as “layering”.
She even produced a letter – dated 2003 – addressed to Dr Delia by UK lawyers Carter Lemon Camerons.
The correspondence details how the tenant claimed that the apartment’s landlord had not received the rent paid over a period of three to four years, at a staggering rate of £20,000 monthly. Ms Caruana Galizia claimed the alleged money laundering could have been in excess of €1 million.
Sources said these documents and others were included in the FIAU report handed over to the police earlier this year.
Dr Delia had vehemently denied all claims of wrongdoing on the matter when they were first reported, insisting he was only holding an account for his client and had never willingly or knowingly broken any laws.
He had also filed several law suits against the late Ms Caruana Galizia following the allegations, however he dropped them soon after her murder.
Economy Minister Chris Cardona also has opaque ties to the alleged scam.
After 2004, one of the London properties changed ownership to Mark Barbara, Dr Cardona’s ministerial aide and chauffer. Dr Cardona had also defended Emanuel Bajada against the 2005 prostitution charges which landed him with a hefty fine and suspended prison sentence.
Ownership of the property later moved on to a shell company in the secretive jurisdiction of the British Virgin Islands, sources said.
How the story unfolded:
Adrian Delia allegedly used a Barclays International account in Jersey to receive the rent of 52, Greek Street, paid to him by Emanuel Bajada, to be forwarded on to Bajada’s brother Eucharist.
Emanuel Bajada was convicted of living off the earnings of prostitution in a Maltese court back in 2010.
Dr Delia’s Jersey account was said to have received £20,000 every month in rent for the Soho address, which Emanuel Bajada’s lawyers in 2003 claimed were not transferred as had been agreed.
After 2004, the house was owned by Mark Barbara, an aide to Economy Minister Chris Cardona, who as a lawyer had defended Emanuel Bajada on prostitution charges in 2005. Ownership later moved on to a shell company in the secretive jurisdiction of the British Virgin Islands.
What Daphne Caruana Galizia had said:
“When a lawyer [Adrian Delia] conspires with his clients to open an offshore account in a jurisdiction like Jersey, in his name, so that those clients have somewhere to park their money from illegal sources temporarily before processing it on to other bank accounts held in the name of companies incorporated in the ultra-secretive Marshall Islands – a system called ‘layering’ – that is not a client account. That is the crime of money-laundering.”
'Delia has nothing to hide' - PN
On Sunday morning, the Nationalist Party issued a statement categorically denying Dr Delia had done anything wrong.
“Dr Delia has nothing to hide and, as he has done in the past, welcomes police questions,” the PN said. “No lies or intimidation will stop him from speaking the truth about the government’s corruption”.
Read: 'Come question me now', Delia challenges police
The PN leader suggested that the news was mere “spin from Castille” intended to distract people from corruption scandals swirling around minister Konrad Mizzi and chief of staff Keith Schembri.
He made reference to an interview with the Times of Malta back in September 2017, saying documents he provided back then had already clarified names and facts related to the allegations.
PD asks for Delia to suspend himself
In a statement, the Democratic Party said that the party's two MPs, Godfrey and Marlene Farrugia, had written to Dr Delia and asked him to suspend himself from hius role as Opposition leader.
"We have always been and will remain in favour of clean politics and the highest standards in political life," the party said.
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