The Malta Independent 24 October 2021, Sunday

Yorgen Fenech charged with money laundering and misappropriation from company

Monday, 30 August 2021, 15:11 Last update: about 3 months ago

Yorgen Fenech has been charged with money laundering and the misappropriation of funds from a company he owns with his uncle Ray Fenech.

Fenech, who is facing separate charges in which he is accused of masterminding the murder of journalist Daphne Caruana Galizia, was charged on Monday afternoon with money laundering offences.

Last week, he was arraigned on separate charges for the attempt to buy weapons off the dark web. The latest two cases against Fenech are unrelated.

In today's arraignment, Inspector Brian Paul Camilleri accused Fenech of money laundering, concealing the provenance of property, which he knew came from criminal activity, and the use of property acquired from criminal activity. Fenech was also accused of complicity in these crimes under the Money Laundering Act and the Criminal Code.

He also was charged with misappropriation to the detriment of Glimmer Ltd and defrauding the company for an amount in excess of €5,000. Glimmer Ltd is majority-owned by a company in which Fenech and his uncle Ray Fenech hold equal shareholding.

Fenech pleaded not guilty. His assets bar those received from inheritance were frozen.

The inspector told the court he was in possession of electronic data gathered by the police in a separate investigation. These messages dealt with criminal activity involving third parties, he testified.

Defence lawyer Charles Mercieca said the messages had been in the police's hands for two years. “I don't want to put the carriage before the horse but when one looks at who is suffering damages in this case and what the amount of damages is... one would question the urgency of the arraignment,” Mercieca said.

Fenech appeared in front of Magistrate Ian Farrugia. The case will now be assigned to another magistrate for the compilation of evidence to start.

Apart from Fenech, two other men faced similar prosecutions on Monday. Two men, 46-year-old Nicholas Cachia and his 67-year-old father Joseph Cachia, were arrested after messages from an electronic gadget referred to criminal accusations being made against them. 

Both pleaded not guilty to the charges.

Nicholas Cachia was mentioned as being the man with whom Fenech discussed plans to escape from Malta following his arrests. 

Due to the nature of the accusations, and because the accused own foreign assets, the prosecution was against having bail granted in their favour.

However, the defence questioned how police could arraign people simply for having been mentioned in a chat. Defence lawyer Matthew Brincat argued that Nicholas Cachia has strong ties to Malta, including a family and business, and so the risk of him escaping the country is low.

The magistrate eventually decreed that the accused must be remanded in police custody, with their assets frozen.

Anthony Farrugia 'il-Buddy' and Patrick Demanuele were also arraigned over similar charges. Demanuele is Tumas Group's Chief Operating Officer, while Farrugia is a former director of one of Fenech's companies. Both were represented by lawyer Stephen Tonna Lowell.

Tonna Lowell strongly argued against denying bail to the accused, arguing that the two had cooperated with police and had already been on police bail with regards to money laundering activity.

He more seriously alleged that the Office of the Attorney General "is in a position of strength, able to stamp its feet and have bail denied, simply to allow the squalid practice of sending people to prison for a couple of weeks until they are granted bail in a subsequent sitting".

Tonna Lowell added that the two men have a clean criminal record, and always cooperated fully with police. "They were in the wrong place at the wrong time," he stated.

This wasn't enough to convince the magistrate, who eventually decreed against bail for the two. 

19:14 Tonna Lowell has walked out of the courtroom.

19:12 The magistrate has emerged from his chambers. Bail has been denied.

18:44 The sitting has been postponed briefly to allow the magistrate to deliberate on his decree on bail. We will be back shortly.

18:36 “Going to prison is very serious, these men have a clean criminal record. They cooperated fully, what is the point of throwing them in prison?” the lawyer continues.

18:34 The court has ordered a ban on some of the defence's submissions, at its request. “Here you have family men with all their property in Malta. Are we going to rub our hands together and hurt them more? They were just in the wrong place at the wrong time," the lawyer says.

18:23 Tonna Lowell challenges them to indicate what evidence they have here, but the prosecutor indicates that they won’t do so at this stage.

18:22 "These are bonuses of €5,000 which neither the company Glimmer and the accused made gain over. […] If you have to, go and accuse me, but don't throw me in prison for this […] Once I have always been trustworthy don't go objecting to my bail.”

The court says the AG is being accused of serious things, of inventing the charges to make a show. "Yes I am going to show the court that these are all invented,” he snaps.

18:20 "Your honour, I have charges which I am not even understanding...they know that they made no profit as required at law […] The AG is in a position of strength, and can stamp its feet and have bail denied, to allow the squalid practise of sending these people to prison for a couple of weeks until they are granted in a subsequent sitting.”
Tonna Lowell is making serious allegations with regards to the prosecution. “When I see these cruelties, throwing people in prison for things which are not correct, makes me angry.”

18:14 The inspector is asked to explain his position. He says that the offences added are "intrinsically linked to the money laundering”.

18:09 The magistrate had to give permission for an arrest of over 6 hours, the lawyer argues. However, the court points out that the law allows the magistrate to give the permission verbally.

18:07 Patrick Demanuele and Anthony Demanuele were arrested earlier this morning. They were arraigned this evening. Therefore the police bail was only on money laundering. The arrest after that was not a valid arrest, he says. "I am not going to waste the court's time by saying that they are trustworthy... everyone knows they are trustworthy.”

18:07 Tonna Lowell says that in 1990s Malta had been criticised because there was no convalidation of the arrest at the time. They had legislated to remedy this, but the practise evolved in such a way as to nullify the reasons for which the law was enacted in the first place, argues the lawyer.

18:01 "But you didn't tell them that in the meantime further charges were going to be pressed," suggests the lawyer. He argues that their police bail is only regarding money laundering and they were never informed that it was being extended to other offences.

18:00 Tonna Lowell asks the inspector why they were being arraigned today, after being arrested in early March and leaving under police bail. The lawyer says they had cooperated with the police and provided all passwords and so on from the time of their arrest to date. The inspector agrees, and Tonna Lowell goes on to ask the inspector if he knew the police bail was only on money laundering. "Yes, because at the time that was the crime they were being investigated for."

17:59 Tonna Lowell says they were not aware of why they were here. The police inspector says that there were messages between them and a third party which the police suspected were involved in criminal activity.

17:55 Anthony Farrugia and Patrick Demanuele are to be arraigned next. The accused appear, assisted by lawyers Steven Tonna Lowell and Chris Dalli.

17:55 On bail, the court said that while the accused had behaved very well while under police bail, today they were formally being charged with more serious accusations.

17:45 Magistrate denies bail and upholds the prosecution’s request for a freezing order.

17:44 The magistrate emerges from chambers and is delivering his decrees on the freezing order and bail linked to Nicholas Cachia and Joe Cachia.

17:25 The case has been put off for a decision. The magistrate will decree shortly.

17:16 Calleja Grima points out that Adrian Hillman had been brought to Malta on a European Arrest Warrant and charged with money laundering. He was granted bail on his arraignment despite having allegedly laundered millions.

17:15 Brincat: "There are people who have been charged over millions and are on bail."

17:14 The magistrate points out to the inspector that the case is not isolated but in a context, pointing to the previous arraignment. He asks the inspector how much money was allegedly defrauded.

17:13 She notes that the younger accused also has a horse trading business.

17:13 The fears required for refusing bail: tampering with evidence and escape, are not present insists Calleja Grima. "This fear must be real and concrete," she adds. "The other issue, the trustworthiness of the accused has been proven by the accused during their police bail."

17:12 On bail, the defence says that had Nicholas Cachia wanted to escape he would have done so six months ago. The change of status from 'suspect' to 'accused' means nothing, as they are still presumed innocent, the defence argues, "otherwise nobody would get bail".

17:02 The court points out that the law says it must uphold the request for the freezing order.

16:57 "The point of a freezing order is not to make a person's life difficult and make it harder to cash his pension cheque, but to prevent the spending of the proceeds of crime," argues Calleja Grima. "We have nothing quantified; we have nothing to say that Joe Cachia has anything to do with the case."

16:54 Calleja Grima reads from a decree in the Claude Licari case, which said that the court, the AG and the accused had access to a remedy in such a case. "The law gives you the circumstances where the AG can appeal if the court denies the freezing order, and this also applies in the inverse," argues the lawyer.

16:52 The reasons for objecting to bail also do not tally with the fact that the men cooperated fully whilst on police bail for a long time, argues the lawyer.

16:51 The other defence lawyer, Matthew Brincat, says that his colleague's argument clearly shows the fact that the request for a freezing order with respect to one of the accused needs to be made in respect to a co-accused. "The mere fact that you are mentioned and you end up before a court with a freezing order. He is 67 years old, a pensioner and has ended up in the midst of a hurricane here."

16:44 Defence lawyer Kathleen Calleja Grima submits a legal argument about the court not being bound to uphold a freezing order request by the AG.

16:40 Asked by the defence, the inspector says he had no reason to object to the police bail granted to the accused in previous months, but insists that things have changed after today's arraignment.

16:37 The magistrate asks the parties to focus on bail and asset freeze issues.

16:37 The lawyer elaborates that the mobile [from where the chats were extracted] has been in the hands of the Police Commissioner since November 2019.

16:36 Brincat complains that people shouldn't be arraigned simply because they're mentioned in chats. "You had six months, colleague."

16:35 "There are chats which implicate him, which other evidence also supports," Camilleri replies.

16:35 Lawyer Matthew Brincat takes over questioning. He asks the inspector for "a single reason for which Joe Cachia was arrested".

16:34 Calleja Grima says that the two accused had not objected to the extension of their police bail back in May. The inspector confirms.

16:31 Nicholas Cachia had been on police bail for six months and was allowed to go abroad in this time, while Joe Cachia had answered police questions during his interrogation, the inspector confirms when asked by the defence lawyer.

16:28 The inspector says that there are things yet to be analysed and investigated.

16:25 The magistrate interjects, saying that he has no power to refuse freezing orders once they are requested by the prosecution. Calleja Grima submits that the court has discretion.

16:24 Camilleri: "I can't say that there is clear positive evidence, but the crime being investigated, and there are yet to be further investigations, and the charges, require freezing orders."

16:23 Calleja Grima: "What about other evidence that Cachia benefited from the proceeds of crime?"

16:22 Defence lawyer Kathleen Calleja Grima asks the inspector how Joe Cachia ended up in the investigation. Inspector Brian Paul Camilleri confirms Joe Cachia was mentioned in WhatsApp chats between third parties. "The chats don't indicate that he took or didn't take money," says the inspector.

16:20 During the investigation, it emerged the accused have assets abroad, Azzopardi Alamango adds.

16:19 AG lawyer Cinzia Azzopardi Alamango says the two men are charged with money laundering and Nicholas Cachia is accused of misappropriation. "They have been on police bail for the past few months, but their status has now changed since they are now accused of the crimes," she says.

16:18 Defence lawyer Kathleen Calleja Grima asks the prosecution to state its objections to bail first since this will help in cross-examination.

16:17 The court, in view of the bail requests, asked Inspector Brian Paul Camilleri to testify.

16:14 Bail is requested.

16:14 The prosecution requests a freezing order over all the assets of the accused. This is contested by the defence in the case of Joseph Cachia, but in the case of Nicholas, the defence says it "bows its head".

16:12 The prosecution says that it is in possession of information extracted from electronic devices containing messages between Nicholas Cachia and which refer to Joseph Cachia. The material led the police to arrest the accused, the prosecuting inspector tells the court.

16:11 The next persons to be charged are Nicholas Cachia, 46, from Attard and his father Joseph Cachia, 67, a pensioner from San Pawl tat-Targa. They are assisted by lawyers Kathleen Calleja Grima and Matthew Brincat. Both accused plead not guilty.

16:03 Yorgen Fenech is escorted out of the courtroom.

15:59 The case is sent back to the registrar to be assigned according to law.

15:59 Defence lawyer Charles Mercieca says he is "conscious of many things". The defence does not request bail.

15:58 The magistrate dictates that:

1. That property which is not or which should not be struck by this order is removed from its effect;

2. That he is given the opportunity contemplated in the law to take €13,000 per year

15:57 At this stage, the defence says it reserves the right to bring forward any requests permitted by law.

15:52 The court turns to the prosecution. The prosecution tells the court that it would be ideal for the defence to present this court order from other proceedings since the lawyers involved are different.

15:51 Mercieca tells the court that in other proceedings, property forming part of the accused's inheritance, was not struck by a freezing order as it did not come from the alleged illegal acts.

15:48 The court says this has to be dealt with at a later stage, not at arraignment. It upholds the freezing order over all of Fenech's assets.

15:47 Mercieca alleges that in their disclosure, the amount was less than €5,000.

15:47 The AG lawyer says they were asking for the freezing of all the assets not the amount defrauded.

15:47 Mercieca: "What amount is Fenech accused of defrauding?"

15:46 Mercieca asks the prosecution to quantify the amounts contemplated in the charges but AG lawyer Cinzia Azzopardi Alamango says the law is clear and this is not relevant at this stage.

15:45 The prosecution at this stage requests the freezing of the accused's assets.

15:44 Fenech, who tells the court that he is a businessman who hasn't been working for the past two years, pleads not guilty.

15:43 Defence lawyer Charles Mercieca says the messages had been in the police's hands for two years. "I don't want to put the carriage before the horse but when one looks at who is suffering damages in this case and what the amount of damages is... one would question the urgency of the arraignment," Mercieca says.

15:42 The inspector says he is in possession of electronic data gathered by the police in a separate investigation. These messages dealt with criminal activity involving third parties, he says.

15:41 "You can stop there," the magistrate tells the inspector. He asks the inspector what led to the arrest.

15:40 He is also accused of misappropriation to the detriment of Glimmer Ltd (C43108) and defrauding the company for an amount surpassing €5,000.

15:38 Yorgen Fenech is accused of money laundering, concealing the provenance of property, which he knew came from criminal activity, and the use of property acquired from criminal activity. Fenech is accused of complicity in these crimes under the Money Laundering Act and the Criminal Code.

15:37 The magistrate administers the oath to the prosecution. Inspector Brian Paul Camilleri takes the stand. He is asked to read out the charges on oath.

15:35 Fenech's case will be heard first. He is assisted by his usual trio of lawyers.

15:32 Yorgen Fenech is conferring with his lawyer Charles Mercieca.

15:32 Magistrate Ian Farrugia has entered the courtroom. The court is in session.

15:21 We are here to follow the arraignment of Yorgen Fenech and two other men in connection with money laundering charges.

15:20 Defence lawyers Gianluca Caruana Curran, Charles Mercieca and Marion Camilleri are here in the courtroom. Lawyers Cinzia Azzopardi Alamango and Marthese Grech are here on behalf of the Attorney General.

15:18 Good afternoon.


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