Issue link: https://maltatoday.uberflip.com/i/794736
maltatoday, SUNDAY, 5 MARCH 2017 13 CapitalOne nobody wanted to handle THE inquiry said that Balti- more Fiduciary Services was placed under the scrutiny of the Malta Financial Services Authority in March 2013, first by the markets supervision unit and then by the conduct super- visory unit. The audit, request- ed by the Financial Intelligence Analysis Unit, is still ongoing. The FIAU's request was to review the extent to which the company was complying with requirements of the Trusts and Trustees Act and a review of the procedures in terms of the Prevention of Money Launder- ing Act. Fenech Adami had already re- signed the fiduciary's director- ship in January 2014. In December 2014, the MFSA sent Baltimore a summary of findings. By October 2016, after MaltaToday had published its story, the MFSA was still warn- ing Baltimore of grave short- comings, warning that it would withdraw its licence. In No- vember 2016, Baltimore gave notice that it would be starting a liquidation process. The second audit requested by the FIAU started in May 2016 by the MFSA's enforce- ment unit (anti-money laun- dering/counter-terrorism sec- tion), to ensure the company had enough background infor- mation on its clients. The MFSA said the FIAU had identified "an element of care- lessness… the FIAU knew that Baltimore had not sent an an- nual compliance report, gave them a warning, then a fine. We wanted to know whether this carelessness extended to them giving services to people whose records of identity they did not even have." FIAU wanted MFSA audit of Baltimore IN November 2012, following a raid on properties owned by pok- er player Robert Soogea, Dutch prosecutor Jeroen Hennekam requested a freezing order on a Bank of Valletta account in the name of CapitalOne Investment Group. The request was based on suspi- cions of drug trafficking and laun- dering of the proceeds of crime, after documents found at differ- ent locations showed that Soogea had substantial interests in Cy- prus and Malta. "Suspect Soogea is involved with residences where drugs were found and is aware of consignment notes that were kept in a hidden space. These consign- ment notes relate to containers with the goods that were shipped from Brazil to Rotterdam… There are serious suspicions that Soogea tried to hide his criminal assets by means of various companies and is possibly involved in interna- tional drugs transportation." In the course of executing the freezing request, inspector Ray- mond Aquilina started investigat- ing CapitalOne's operations in Malta, finding that it was owned nominally by Baltimore Fiduciary Services – a firm owned by Rich- ard Abdilla Castillo and which had Beppe Fench Adami as non- executive director. On 13 January, 2013, in his re- port to superiors, Aquilina stated that one of the Baltimore direc- tors was a PEP – Beppe Fenech Adami – and requested that the information gathered be referred to Europol. That information was passed on to his superior, As- sistant Commis- sioner Michael Cassar, who told the board of in- quiry that he referred the file to the Assistant Commissioner Special Branch, Andrew Seychell, and to the international relations unit on 17 January. At this point, Inspector Mario Cuschieri noted the file with "B U in 3 months" – "bring up, in three months". Cuschieri told the board of in- quiry his note did not refer to the police investigation itself, but only in terms of the freezing or- der. At this point, Aquilina's in- vestigation appears to have never branched off from what was the Dutch prosecutor's request for a freezing order, into a proper money laundering investigation meriting its own file. When the freezing order was no longer required, after 18 April, because the charges against Soo- gea were dropped due to a lack of evidence, the file was still in the Vice and Economic Crime super- intendent's in-tray. Cassar was now heading the Security Service, while Aquilina referred the case to the money laundering unit superintendent, saying: "Since all action has been taken and the freezing order re- voked, papers are being referred to not and for onward reference to Europol office through AC SB [Special Branch]." The file was never pursued how- ever, the board of inquiry said, and it lay gathering dust until the economic crimes superintendent sent the file to Mario Cuschieri on 25 December 2013, who two days later annotated it with "PA" or "put away". Cuschieri told the board that his unit was not an investiga- tive unit, dealing only with inter- national requests for assistance. While the drug charges against Robert Soogea (a CapitalOne beneficiary) in A m s t e r d a m were dropped due to lack of evidence, the Dutch pros- ecutor told the board of in- quiry that it was "difficult to conclude whether the financial transactions could have [had] a significant impact on my investigation." The board of inquiry also found that Assistant Commissioner Mi- chael Cassar ignored the original email for the freezing request sent by Dutch prosecutor Jeroen Hen- nekam. Cassar said he was unsure of the identity of the sender since such requests were made through Europol or letters-rogatory; and seeing that the request was copied to the Attorney General, the mat- ter could be handled by the AG's office instead. But the board of inquiry said Cassar was obliged to reply to Hennekam, at the very least given the possibility that the freezing order could have led to a police investigation of a serious crime. How serious investigation lost steam 'Fenech Adami's name turned the investigation into a hot potato that could have brought unpleasant consequences on whoever dared to handle it in January 2013' Baltimore Fiduciary's owner Richard Abdilla Castillo Former police chief Michael Cassar, who at the time of the CapitalOne investigation was Assistant Commissioner