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MaltaToday 10 May 2023 MIDWEEK

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2 NEWS maltatoday | WEDNESDAY • 10 MAY 2023 2 CONTINUED FROM PAGE 1 Their brother George Farrugia was granted a presidential pardon in 2013 when MaltaToday had revealed his role in a network of bribery that included former Enemalta chairman Tancred Tabone, the businessmen Anthony Cassar and Francis Portel- li. Farrugia was then heading the John's Group company Powerplan, an importer of lubricants. Before exercising her right to si- lence, Farrugia told the court that she did not know the identity of the ultimate beneficial owner of Aikon, a company with a Swiss bank account allegedly used by George Farrugia as a personal slush fund that siphoned off Powerplan profits. MaltaToday had revealed that Ai- kon had been set up in 2002 and op- erated until 2010 without the Farru- gia brothers' knowledge. Replying to questions put to her on the stand this morning by law- yer David Farrugia Sacco, Catherine Farrugia said she was not officially employed by her husband but would perform some tasks on a voluntary basis. The witness told the court that she had decided to go to work with her husband because George Farrugia's frequent absences were taking a toll on her marriage at the time. She described Powerplan as a com- pany "in the lubricants, petrol sta- tions and oil business." Farrugia said she did not know of Powerplan's agreements with Total and other foreign companies and had never interacted with them. "I know the lubricants would have Total written on the cans," she said, when pressed on this by the lawyer. "To type out an invoice I would have instructions, either from my husband or someone else," she said, referring to local clients such as me- chanics and service stations. She said she "might have had to make some invoices for George," and recalled the oil exporting company Totsa. "One fine day, accountant John Far- rugia came up to me and told me that the accountant was leaving the company and that I would have to do them [the invoices]." 'I don't know who incorporated Aikon' Catherine Farrugia recognised a Trafigura invoice shown to her, as having been issued by Aikon. "It was a company like the others. Worked in the oil business," she said. She said she was of the under- standing that Aikon was a part of the John's group of companies but claimed not to know who had in- corporated Aikon. "Today, I know my husband was involved in it, but I don't know anyone else." She insisted that she didn't know who the beneficial owner of Ai- kon was. "Definitely not me… they don't tell me anything. My husband doesn't involve me in business. It was the first thing we agreed on after getting married – that we don't talk about work." Farrugia was then shown an email exchange on invoices sent and re- ceived, in which her email address was one of the recipients. "George used to tell me to issue an invoice on X, or Y. What's the problem?" asked the witness. "Did you ask [your husband] whether the same arrangement ap- plied to Aikon?" probed the lawyer. "No. I am not interested," the wit- ness replied. "Aikon was another company to me." She insisted that she had not seen any documents stating that Aikon belonged to George Farrugia. The subject of the questions turned to George Farrugia's dealings in Switzerland. Farrugia said her husband would only inform her of his frequent visits abroad on the eve. She said her husband would travel to Switzerland to meet suppliers but added that he had never mentioned any banks. "He never told me [about any Swiss bank accounts] but if you look at the invoice you'll see [that the bank details are of a Swiss ac- count]," added the witness. "Totsa's head office was in Switzerland. How was I supposed to know whether any banking took place?" Farrugia Sacco's line of question- ing then turned back to when Cath- erine Farrugia had first heard about Aikon. "So when you found out in 2010, what did your husband tell you?" he asked. At this point, lawyer Arthur Azz- opardi, assisting the witness, object- ed to the lawyer's question on the grounds that the information being requested was privileged. "He is try- ing to get around the presidential pardon. He is trying to undermine her husband's pardon…" Farrugia Sacco denied that this was the intention, saying that he was "simply trying to arrive at the point that the witness herself had been writing these invoices and not the defendants." Azzopardi pointed out that in that case, she was entitled to the right to remain silent to avoid incriminating herself. The magistrate agreed and cau- tioned the witness, who then opted not to testify further to avoid ex- posing herself to the risk of criminal proceedings against her. Replying to Farrugia Sacco's final question, about whether she had ev- er discussed Aikon with the defend- ants, Catherine Farrugia replied that she had not. The case was adjourned to Sep- tember. In other court proceedings over the years, it had emerged that her husband, George Farrugia, was Ai- kon's sole beneficial owner. It was back in 2013 that MaltaToday had revealed that the oil trader had set up Aikon's bank account at the Ed- mond de Rothschild bank in Geneva in 2004. Farrugia's brothers had tak- en him to court in 2010 for having funnelled cash from Power Plan into Aikon's Swiss bank account, to their detriment. George Farrugia had then claimed that his brothers had been aware that Aikon was being used as a slush fund for officials such as then Ene- malta chairman Tancred Tabone. Catherine Farrugia testifies in prosecution of John's Group principals Finance ministry introduces AI- powered software to detect tax evasion MARIANNA CALLEJA A new AI-powered soft- ware will be used by tax au- thorities to alert them when a person or business's de- clared income does not tally with their wealth. The finance ministry an- nounced the use of this soft- ware during a press confer- ence on Tuesday. The system will allow the Commissioner for Revenue to be able to extract data concerning taxpayers from all tax departments, as well as link it to data received from third-party sources. "This will make it far eas- ier and quicker for the au- thorities to immediately detect tax evasion and act on it," Caruana said when announcing the software. Already in use in the UK, New Zealand, the Nether- lands, Ireland and Canada, the software will be analys- ing VAT returns by the end of this year and all other forms of taxes within the next three years. The AI software will draw data from different regis- tries and bank accounts to assess the individual's cash deposits and illiquid assets in a bid to help the tax de- partment keep tabs on in- come and tax dues far more quickly and efficiently. "I understand some peo- ple will not appreciate this effort. They will even say it's an attack on business and that I have a grudge against businesspeople or that I am attempting to stifle eco- nomic growth," Caruana said. The Minister said the Commissioner for Revenue is seeking ways of mod- ernising Maltese tax ad- ministration by integrating all different tax types and supporting processes. The software will cost the gov- ernment €3 million. During his announce- ment, Caruana explained how the software marks the beginning of "a much-need- ed" culture change. Such software, he add- ed, will not wait for people to be investigated because someone else reported them anonymously, or be- cause they were randomly picked and probed. George Farrugia A new AI software has been introduced, which will draw data from registries and bank accounts to assess people's cash deposits and assets in a bid to help the tax department keep tabs on income and tax dues Clyde Caruana

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