A lawyer for two former directors of Zenith Finance claimed that money laundering proceedings against his clients were “a fishing expedition” and that the pair should never have been arraigned.
This argument was stressed, somewhat animatedly, by lawyer Edward Gatt during the latest hearing in the ongoing compilation of evidence against Matthew Pace and Lorraine Falzon who are facing charges in their personal capacity as well as on behalf of the advisory firm they represented.
The two were among 11 individuals arrested alongside former OPM chief of staff Keith Schembri and denied bail upon arraignment in March after pleading not guilty to a series of financial crimes, including money laundering and document forgery.
Pace and Falzon were granted bail a few days later by Magistrate Donatella Frendo Dimech who is presiding over the compilation of evidence.
“These two should never have been arraigned,” argued Gatt during the brief hearing during which little progress was registered by the prosecution.
Proceedings were a “constant fishing expedition because at pre-arraignment stage there was not sufficient evidence to arraign these persons,” went on the lawyer.
The prosecuting lawyers from the Attorney General’s office rebutted that charges had been filed upon the conclusions of the magisterial inquiry.
But the defence lawyer insisted that Pace and Falzon had been targeted simply because Schembri and Nexia BT director Brian Tonna featured in the investigations.
“Everyone is demonising Keith Schembri,” Gatt claimed.
Drawing a parallel with similar charges pressed against top officials at Progress Press, the lawyer pointed out that unlike “what happened there” Pace and Falzon “were still here” in a clear reference to the ongoing case against two former Progress Press officials.
In that case, the court, presided over by Magistrate Natasha Galea Sciberras, found no prima facie evidence linking managing director Michel Rizzo and former financial controller Claude Licari to fraud and money laundering allegations in their personal capacity.
That court drew a clear distinction between personal and vicarious liability, declaring that Rizzo had no case to answer in his personal capacity while Licari’s personal liability was limited to his alleged breach of accountancy laws.
In the case of Zenith Finance, as money laundering reporting officer, Falzon had spent “some fortnight in jail” where she was ridiculed as a “snob”, argued her lawyer.
As for Pace, he had been targeted simply on account of a “template document” concerning a client’s portfolio having funds deposited in an account at Pilatus Bank.“Their company worth millions was forced into bankruptcy,” concluded Gatt.
Meanwhile, while criminal proceedings continue, both accused filed a joint constitutional case in their personal capacity as well as directors of their investment company claiming that the money laundering charges breach their fundamental rights.
Three years ago, the company had been ordered to pay a hefty administrative fine by the FIAU over the same facts underpinning the criminal action against them and so, in line with the principle of double jeopardy, they could not be tried and punished twice, their lawyers argued.
The case continues.
Lawyers Edward Gatt and Mark Vassallo are defence counsel.