Issue link: https://maltatoday.uberflip.com/i/794736
maltatoday, SUNDAY, 5 MARCH 2017 12 MATTHEW VELLA THE board of inquiry tasked with investi- gating the way Maltese police handled the CapitalOne money laundering case, has de- clared it cannot exclude the possibility that the criminal investigation failed to gather steam when the name of Nationalist MP Beppe Fenech Adami cropped up in January 2013. But it made a clear declaration that the CapitalOne investigation – for reasons un- known – was shorn of any guidance from police superiors when it merited a proper investigation by anti-money laundering in- spectors. "There was a serious shortcoming from police not to persist in the investigation," said the board of three retired judges who said the facts of MaltaToday's story had been in the main substantiated. When it came to the fact that police inves- tigators had flagged Fenech Adami's name as the director of Baltimore Fiduciary, which owned CapitalOne as nominee, the judges said: "It cannot be said for certain that the investigation did not continue when the PEP's name was revealed... equally, it cannot be excluded that this happened." At the time, Fenech Adami was a parlia- mentary assistant for home affairs, and the country had just entered a general elec- tion. The MP has always denied having any knowledge of the investigation at the time. The board of inquiry presided by Judge Joseph D. Camilleri, launched after Malta- Today published its story in October 2016, found that information on banking transac- tions related to CapitalOne – obtained fol- lowing a freezing request by Dutch investi- gators into an Amsterdam drugs bust – had not been passed on to the Dutch prosecutor only because they had not been specifically requested. "This board believes the police was duty- bound to investigate CapitalOne on the se- rious suspicions of money laundering… the investigation that was started by anti-money laundering unit inspector Raymond Aqui- lina found itself in difficulty, stopped, then was practically forgotten. "This investigation, borne indirectly out of a freezing request, merited its own formal file, and had to be given the right direction from Aquilina's superiors, so that it could be carried out like other normal investiga- tions." The board said that MaltaToday's asser- tion that CapitalOne's €5.3 million in bank- ing transactions should have been passed on to Dutch prosecutors, had no basis, and that the Attorney General had even denied receiving this evidence. But after analysing the transactions that passed through CapitalOne's bank accounts – in a separate technical report that was not published – the board said that there was a "serious shortcoming" by the police not to persist in the investigation. "In the board's opinion, this investigation did not continue because there was a lack of strong and necessary will on the part of the police to allow the investigation to take its normal course… "Indirectly the investigation started from what appeared as an innocuous request to the police for a freezing order, and it is hard to understand why the investigation was not pursued. The board met the usual excuses of 'passing the buck' from one official to the other, or to the bank which has a designated person to report suspicious transactions to the FIAU." It said that other police witnesses appeared satisfied that the Dutch did not pursue any more criminal action against suspects Rob- ert Soogea and Henrique Cumberbatch after April 2013, when drug-related charges were dropped for lack of evidence. "They argued that no money laundering investigation could take place without a court of law finding guilt on such a crime. Others said the Attorney General should have re- quested the Dutch whether it could start 'an- other investigation in my country'. "Nobody mentioned the fact that a PEP's name, Beppe Fenech Adami's, had cropped up in the investigation… his name turned the investigation into a hot potato that could have brought unpleasant consequences on whoever dared to handle it in January 2013. The saying goes that one does not bite the hand that feeds him (sic), but a person of integrity does not abide by this maxim. The responsibility of the role must be carried out even in the burdensome circumstances when personal interests might suggest otherwise." CapitalOne, the 'hot potato' CapitalOne A lack of guidance from police top brass showed there was no will to investigate a possible money laundering case after the name of a PEP – Beppe Fenech Adami – cropped up during preliminary investigations WHILE the board of inquiry found that the Maltese Attorney General cooperated fully with the Dutch, it turns out that the FIAU was also informed that same month by then deputy AG Donatella Frendo Dimech of the freezing order on the CapitalOne bank accounts. Dutch prosecutor Jeroen Hennekam told the board of inquiry that Frendo Dimech co-operated fully with him, and disputed MaltaToday's assertions that investigators had been frustrated that a record of the financial transactions of CapitalOne were not passed on to them. A series of emails dated 28 October, 2016 – after MaltaToday's story was published – were also exhibited by the Attorney Gener- al's office, in which the Netherlands Chief Prosecutor insists that there was "[no] indication of any frustration of this case [with] anyone in Malta." It turns out that this record of financial transactions, totalling some €5.3 million, went missing from the police file dealing with the freezing request. The AG's office denied having received this information, as claimed by the police, which was supplied the information in the first place by Bank of Valletta. The Dutch prosecutor said it was diffi- cult to conclude whether the transactions could have had a significant impact on the investigation, given that the charges were dropped in early April for lack of evidence. The board said such documents should have never gone missing from the police file. "This investigation was abruptly stopped. While the disappearance of these docu- ments could have complicated the investi- gation, certainly this was no reason for the investigation to stop… this investigation did not continue because of the lack of will from the police." The cash that flowed into CapitalOne was used to pay off Soogea's credit cards before finally in 2016, Baltimore sold off CapitalOne's entire shareholding to Greek businessman Ioannis Moustos, who had al- ready been convicted of securities fraud in Greece in 2007. It is unclear so far whether Bank of Val- letta, which hosted CapitalOne's accounts, had alerted the Financial Intelligence Analysis Unit as to the large transactions passing from Greek companies into Capi- talOne The transactions included: • In February 2009, the company gave notice that it was raising authorised share capital from €50,000 to €200 million – possibly part of Moustos's plans to open a bank in Malta. • In August 2009, it received €489,000 from a Greek associate that was later paid out a week later to acquire €490,000 in the Greek firm Asbavel. • In November and December 2009, it received €1 million in deposits from the firm Logistics SA in five pay- ments. Over December 2009, €200,000 was paid out to acquire 70% of a Greek tourism company GATS, and thereafter another €250,000 to increase its share capital. • In January 2010, it received €1 million in deposit from a fur coats mer- chant, Agar Srl, in Poggibonsi, Italy, which the next day was deposited into a Valletta Fund Management account. • Over the course of 2010, €2.3 million was used to increase share capital in GATS, which was later absorbed by an- other Greek company. • Payments of €610,000 also came to CapitalOne from Gillesa Shipping, a firm which Dutch police said also belonged to Robert Soogea; and €1 million from MNS Commercial Brokers of Dubai. Record of €5.3 million transactions missing from file Beppe Fenech Adami: the inquiry said it could not confirm, neither exclude the possibility that a police investigation did not continue when his name cropped up as director of Baltimore Fiduciary Services