The Malta Independent 21 January 2021, Thursday

Gordon Debono’s lawyers cast doubts on legitimacy of money laundering charges

Wednesday, 16 December 2020, 17:39 Last update: about 2 months ago

Lawyers for Gordon Debono and his wife have cast doubt on the legitimacy of the charges against them.

Gordon Debono and his wife Yvette appeared in court before magistrate Donatella Frendo Dimech this afternoon for the first sitting in the compilation of evidence against the couple who are accused of money laundering. At one point, Yvette Debono was allowed to leave the hall as she was unwell.
The couple had been charged and remanded in custody in late November, but the compilation of evidence against them started today.

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Lawyer Roberto Montalto informed the court that he was appearing for Gordon Debono and his companies and lawyer Joe Giglio was appearing for Yvette Debono and her company Yves Ltd.

Recusal request

The sitting got off to a rocky start with Montalto telling the magistrate that he believed there were grounds for her to recuse herself.

The investigation goes back to 2013, he said, according to disclosure. Italian authorities were also investigating his client, he said, adding that, “The presiding magistrate could have, and probably had, given an opinion or advice about the present case or subsidiary and related issues,” in her previous role as Deputy Attorney General.

The magistrate said that Montalto had to bring some form of prima facie evidence that the investigation had “touched the AG’s office up to the 29 October 2015.” She asked the representative of the office of the AG in the courtroom to testify.

Lawyer Elaine Mercieca from the Office of the Attorney General informed the court that the file on Debono had been opened in 2016 and the inquiry had started in November 2019. “The facts which form the merits of the case in Italy are factually distinct from those related to the proceedings at hand,” she said. “From verifications carried out by the office of the AG it emerged that the file in question about the Dirty Oil operation was opened in the year 2016.”

On her part, the magistrate said that if she noticed anything she had worked on, as the case progressed, she would immediately recuse herself, but was not happy with the lawyer’s suggestion of possible bias.

“It is very unfair to come here without a crumb of evidence to support the conjectures,” said the magistrate, pointing out that the dates were easily established.

The court, in view of the fact that “no evidence had been brought, not even prima facie, that this court at a time when it was deputy AG gave advice or expressed some opinion about the merits of the proceedings presently before it, denies the request for recusal as there is no legal basis for it.” However, the magistrate added, should the parties show otherwise, they are to bring this fact to the attention of the court immediately.

Lawyer Joe Giglio voiced a complaint about the fact that the accused had been arraigned on 26 November, but that it was just today that an audience with witnesses testifying was being held. “In this particular case, no respect was shown to the spirit of the law,” said the lawyer.

Montalto said he agreed entirely with that said by Giglio and reserved his position about the same.

“You don’t bring people to court just to stay within the 15-day limit,” said Giglio. “It is verging on the ridiculous,” Montalto said.

Police investigation

Inspector Omar Caruana from the Criminal Investigations Department of the police took the stand.

He explained how the investigation had begun in 2013 after the police received confidential information. Operation Proteus was set up together with Europol and the Italian Guardia di Finanza.

Large volumes of financial data were analysed, he said, with local banks giving copies of thousands of cheques.

Gordon Debono was found to have an account in Satabank closed in March 2018, which in 2 years received some €530,000 from, amongst others, Petroplus and Petroplus Trading ltd (BVI).

Debono was a shareholder and director of Petroplus and other companies, the court was told.

The investigation found many cheques made out to Shaun Higgans who would cash them. The total amount cashed by Higgans, who is also accused of money laundering in separate proceedings, is thought to be over €7.1 million.

The inspector said from that the companies’ books, police had found that inflated costs had been used to evade tax.

After seeing sufficient evidence to suspect money laundering, the police sought an arrest warrant against Debono at his Marsaskala house. A number of devices were seized. He said he had lost his mobile but hadn’t made a police report about it, recalled the inspector.

A total of 30 vehicles were seized from the Debonos. Gordon had told police under interrogation that his income was from leasing out properties and stood at around €5000 per month. He was unable to list the properties he was renting out, observed the inspector.

Furthermore, there were invoices and instructions to payment of companies “which have a bad reputation,” Caruana said.

Yvette Debono had several hundred thousand euros deposited with various local banks, despite government employment registrar Jobsplus listing her last employment as being a Learning Support Assistant in 2016.

She told the police that she was a housewife and hadn’t worked for 8 years. She had become a director of some companies, but this was in name only, she had said under interrogation.

She had bought €1.7 million worth of property in Cyprus through wire transfers in transactions which also featured companies in Mauritius, added the inspector.
Inspector Caruana explained that there were many documents that were yet to be analysed about property transfers abroad and in Malta, as well as about diamonds. A police search of her home recovered 3 diamonds and fragments of gold, he said.
Higgans would simply cash the cheques and bring all the money back to Debono, said the witness under cross-examination by Montalto. The cheques were made out in his name and he would give all the money to Debono, he said.

Montalto suggested that the money would be specially allocated from the central bank, but the witness said he had no knowledge of this.

“What is the predicate offence?” – defence
The lawyer suggested that aside from the monies cashed by Higgans, the rest of the amounts formed part of intercompany loans and that therefore, the money always “moved around in Debono’s pocket.”

The witness said this wasn’t the case, as there were also payments to foreign companies.

“There are some legitimate transactions and some not” Caruana said, explaining that he was not convinced that the transactions really represented trade. “There was a lot of trade that wasn’t legitimate in our eyes.”

Giglio asked the witness what was illegitimate about it.

“We are saying that there were a lot of transfers between Gordon and Yvette’s companies which were not supported by documentation.”

Giglio hit back: “when I’m doing an internet banking transfer between my own accounts, what supporting documents do I need?”
“It’s not that simple,” replied the witness. “Inter-company transfers over a certain amount required documentation by law.”

“This was from the bank. So, the bank was satisfied,” said the lawyer. “And so you weren’t satisfied you arraigned these people?” That was “part of the reason,” replied the inspector.

Both the magistrate and Giglio asked the witness what the predicate offence was in this case. A predicate offence is the illicit source of funds, the reason the money had to be laundered, for example prostitution, or the sale of drugs.
“It could be any offence” replied the inspector.

The court demanded an explanation of what the predicate offence was.

“We are still investigating” came back the reply, prompting the magistrate to angrily ask why she had two people under arrest from November if the investigations were still underway. “We don’t even have a predicate offence, which is vital to arraignments over these crimes,” remarked the magistrate.

The court observed that there needs to be an underlying offence. “Without a predicate offence it’s not going to fly,” said the magistrate. “Laundering money coming from which crime?”
“A specific crime, I cannot mention at this stage.” said the inspector.

Montalto claimed that Debono had spoken to the Prime Minister to specifically request an investigation into his dealings, as he grown weary of the pressure he was under. The inspector said this was the first he was hearing about that.

The case will continue tomorrow with a decision on bail and whether the court had seen sufficient prima facie evidence for indictment.

Inspectors Joseph Xerri, Omar Caruana and James Turner prosecuted, together with lawyers Elaine Mercieca and Cinzia Azzopardi Alamango from the office of the AG.

 

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