Issue link: https://maltatoday.uberflip.com/i/634260
maltatoday, SUNDAY, 31 JANUARY 2016 8 News Spiteri refused appeal on extradition order MATTHEW VELLA A London court has refused Patrick Spiteri permission to appeal an extradition order that will see him face eight separate charg- es of fraud on a total of €7.4 million. The 51-year-old was arrested in a police swoop on his wife's country estate in 2014. The former tax lawyer had been living permanently in the UK since January 2014 in a €4 million country estate owned by his part- ner's mother, evading the Maltese courts on eight separate cases linked to fraud and misappropriation charges. His partner, Lorna Maltby recently was re- ported to have arrived in the country earlier last week. After his arrest Spi- teri was granted bail against a security de- posit of £70,000 and a strict 11pm to 4am curfew. Spiteri absconded from Malta after claim- ing he was unable to be present in court due to an alleged illness, which led him to go to London for treatment for the onset of multiple sclerosis. He had been witnessed walk- ing in Valletta, aided by a walking stick. He never returned to face charges of defraud- ing an Italian busi- nessman of almost €5 million in the court of Magistrate Consuelo Scerri Herrera, who at the request of the prosecution had to postpone the case i n d e f i n i t e l y . Adding to the prosecution's troubles was that investi- gators were spending a lot of time chasing the money trail in tax havens away from Malta and the fact that Spiteri changed his lawyers several times, which meant the new defence team had to be given time to study the case. In its original judgement, the Westmin- ster Magistrates Court said that while Spiteri produced reports in relation to his health situation, "it appears he may be suf- fering from a form of chronic fatigue syn- drome as well as stress and anxiety." Spiteri testified in five separate sittings over February and April 2015 when he de- nied every allegation of criminal conduct laid against him and provided details of his defence and challenges to every one of the serious allegations of dishonesty he faces. Spiteri lived in Italy between 2007 and 2010 with his partner Maltby. Between April and July 2009, he was detained un- der house arrest over allegations of fraud. He then came to Malta where he lived here until 2014, before decamping to the Sur- rey home of Maltby's mother – Elizabeth Spencer. Spiteri told the court that he is working on a part-time basis as a financial advisor in the UK, earning some £16,000 a month (€21,700). His partner is also in part-time employment, earning approximately £2,000 a month. In the original decision, district judge John Zani accepted the requests for extra- dition on six of the eight cases, effectively meaning Spiteri had to be extradited to Malta to face the courts. Zani said each of the EAWs alleged that Spiteri was the author of a very substan- tial fraud, and that his ties to the UK were limited. "Albeit there will be some unfor- tunate hardship caused to Mr Spiteri, his partner and their children in the event that extradition is ordered, that of itself is insuf- ficient for the request to be declined." Zani said that Lorna Maltby's mother would have to offer assistance, in the case of extradition, to ensure her young chil- dren can continue in their private educa- tion, which is costing the couple £2,500 a month. Patrick Spiteri: facing extradition PM's Gaffarena case could have criminal consequences MATTHEW VELLA A criminal investigation into the €1.65 mil- lion expropriation of Marco Gaffarena's 50% share in the 36, Old Mint Street, Val- letta building could be precipitated by the very case that Prime Minister Joseph Mus- cat personally instituted to recoup the gov- ernment lands transferred to Gaffarena. The Qormi property developer was grant- ed €516,000 in cash and the rest in govern- ment lands he selected in return for his share in the Valletta palazzo that houses the government's BICC offices. The irregular expropriation has cost former parliamentary secretary Michael Fal- zon his Cabinet position, but also prompted the resignation of civil servants who facili- tated an expropriation that had no public purpose, and whose erroneous valuations netted Gaffarena an aggregate €3,378,000. But under legal action instituted by Mus- cat to recover the wrongly-valued lands, the prime minister could also kick-start a crimi- nal investigation. Under the Disposal of Government Land Act (DGLA), any person "who enters into or appears on any deed, instrument or con- tract" in contravention of the DGLA's pro- visions is guilty of an offence and liable on conviction to a fine of not more than €2,329 or imprisonment not exceeding six months, or both. The contravention must be in breach of Article 3 of the DGLA, which lists the ways in which government land can be disposed of – article 3 (g) states that no government land can be disposed of unless it is made "in accordance with any other law for the time being in force". The question is whether this would apply to the DGLA's Schedule, which does not al- low the exchange of lands for expropriation purposes – as happened in the Gaffarena case – "if the value of the government land to be given exceeds 30% of the value of the expropriated land". Even so, under the DGLA it is a defence for any person to prove they took "reason- able steps to ascertain that the deed, instru- ment or contract would not, where made, be in contravention of the provisions afore- said". The other question to ask is whether any breach would directly affect Falzon, who rubber-stamped the expropriation, or the former GPD directors, who have been accused by the NAO of acting in collusion with Gaffarena. If the court declares that the transfer of lands to Gaffarena is null and void on the ground that it was made in contravention of Article 3, it will be conclusive evidence that the disposal was made in contraven- tion of these provisions. "Where any ac- tion for any such declaration has been taken, the period of prescription in re- spect of any offence against this article shall be suspended until a final judgment on the issue is given or the action is aban- doned." The Civil Court has provisionally upheld a prohibitory injunction filed by the Prime Minister against Gaffarena. The warrant was filed to protect the staggering credit of €1,594,500, which the government wants refunded following the rescission of the contracts of sale for Gaffarena's two 25% shares in 36, Old Mint Street. The properties whose transfer are poten- tially subject to rescission are: a shop on Manwel Dimech Street, Sliema; land at tal- Handaq, Hal Qormi; land at Tas-Salvatur, Siggiewi; two parcels of land at Bahar ic-Ca- ghaq; and land at Hal Mula, Haz Zebbug. According to valuations carried out by PricewaterhouseCoopers on behalf of the Office of the Prime Minister's internal audit and investigations department (IAID), the Old Mint Street property was over-valued by the Lands Department's external archi- tect Joseph H. Spiteri – the government in effect ended up acquiring property worth €944,500 while the lands Gaffarena received were worth €2,862,000. Gaffarena also re- ceived €516,000 in cash. Falzon hits back at NAO An allegation by Michael Falzon that the architect who valued the Old Mint Street palazzo had a "conflict of interest" because he also rendered services to the National Audit Office, turns out to be not entirely precise. Architect Joseph H. Spiteri was last en- gaged with the NAO back in 2009. Falzon made the allegation during an in- terview on Friday evening on the PBS chat- show Xarabank, in which he took exception to the findings of the NAO report that ham- mered the final nail in the case of the former parliamentary secretary for lands. "The report was all a justification for a politically motivated attack against me for having drawn the NAO's attention before this case erupted on [NAO chief investigat- ing officer] Mr [Keith] Mercieca's antics… It is a shameful mess of a report," he said. When the Gaffarena expropriation scan- dal broke, Falzon had actually defended the valuations of Spiteri as the work of a univer- sity academic whose specialisation is prop- erty valuations. The NAO has defended its examination of Spiteri's role in the expropriation saga. "The NAO met with Spiteri and clarified various aspects of his involvement in the process of valuing the lands exchanged, as well as his relationship with Gaffarena and the GPD," a spokesperson said. The NAO's own audit found that Spiteri was well aware that the lease on the palazzo would expire in 2028, "which fact should have been considered when determining the value... equivalent to a reduction of 20 per cent of the value, which, if applied by the consultant architect, would have result- ed in a significantly lower valuation." Michael Falzon, resigned