A court has fully acquitted five brothers of complicity in corruption, after it found they were not accomplices in the oil bribery scheme concocted by their own brother, George Farrugia.
Instead, the court ruled that the five brothers were victims of George Farrugia's secret operation to bribe Enemalta officials in exchange for oil supply contracts. The massive scandal was revealed by MaltaToday in January 2013.
The brothers, who served as co-directors of the family-owned firm Power Plan Limited, had been accused of backing their brother, state witness George Farrugia, in his illicit schemes to bribe high-ranking officials at the state energy corporation Enemalta and the Mediterranean Offshore Bunkering Company Limited (MOBC) back in 2005 and the years prior.
However, in a scathing 76-page decision delivered on Monday, Magistrate Yana Micallef Stafrace ruled that the prosecution had failed to prove its case.
The court tore into the credibility of the prosecution’s star witness, George Farrugia—who had been granted a presidential pardon in 2013 to spill the beans—labelling his testimony "evasive" and entirely "uncorroborated."
The case, which had been running since February 2015, saw brothers Raymond, Antonio (Twanny), Salvu, Emanuel and Gaetano Farrugia arraigned. It is only one of a slew of cases instituted against seven different people connected to alleged corruption in the Enemalta oil scandal. Some of these proceedings remain ongoing.
Although prosecutions against minor players at Enemalta have not been successful, the main accusations, against former Enemalta chairman Tancred Tabone, his consultant Frank Sammut, and oil bunkering partners Francis Portelli and Anthony Cassar, remain pending more than 10 years on.
With the acquittal, the court also threw out a sweeping freezing order that had been slapped on the brothers’ personal assets and properties since 2015.
The Family Empire
In 1990s, the Farrugia family business, which started out in their father's time as John’s Garage, grew into a sprawling corporate group.
The family empire comprised several branches: John’s Garage Limited (chauffeur-driven cars and car hire), John’s Auto Care Limited (mechanical repairs, panel beating, and spraying), Sundays Travel & Tourism Limited (tourism and travel), J.F. Motors Limited (importing SsangYong and Daewoo vehicles) and Power Plan Limited (petrol stations and fuel trading)
While the brothers divided up the day-to-day operations of the various sectors, Emanuel ran the chauffeur-driven division, Salvu and Antonio handled repairs, and Raymond oversaw travel and general group management, George Farrugia was given free rein over Power Plan Limited as its managing director.
However, the court heard that the brothers’ involvement in Power Plan was largely limited to their formal roles as directors, with several testifying that George kept them at arm’s length from the company’s oil operations and financial dealings.
Unlike the other branches of the family business, where work was visible, practical and easier to follow, Power Plan’s operations revolved around oil tenders, commissions, international transactions and dealings with foreign suppliers—a side of the business that the brothers described as increasingly difficult to understand.
Reports of corruption in Enemalta’s heavy fuel oil procurement
The police investigation kicked off in January 2013 when Malta Today broke the news exposing corruption in Enemalta’s heavy fuel oil procurement.
The reports implicated Frank Sammut, a member of the Fuel Oil Procurement Committee, who was allegedly pocketing "consultancy fees" from Dutch oil giant Trafigura into a Swiss bank account.
When the net closed in on George Farrugia, who acted as the local agent for Trafigura and French oil firm Total, he secured a presidential pardon on 10 February, 2013.
He then pointed the finger at his five brothers, claiming they were fully aware of, and had approved, the kickbacks he was paying to state officials to secure lucrative oil tenders. The brothers were prosecuted when George testified that as his business partners, the brothers were “100% conscious” of the payments and had given him the go-ahead to proceed with arrangements that allegedly began in 1996. This meant that they were to be arraigned as accomplices to the crime.
'They knew everything!'
Taking the witness stand, George Farrugia had said that the family board was fully in on the illicit arrangements, a claim his brothers completely rejected.
He testified that the bribery began in 1996 when Alfred Mallia, then head of Enemalta’s petroleum division, demanded a cut to store Total’s diesel at the Ħas Saptan facility.
"I did not give him an answer right away and told him that I would get back to him on this matter later on," George Farrugia testified.
"I went and spoke to my brothers to tell them that he had asked for a payment on the work we were doing. I spoke to them and my brothers agreed that I could go ahead with this arrangement."
When asked by the court to clarify exactly who he spoke to, George insisted: "Regarding this whole matter, they all knew. That is to say, we had some board meeting, though I won't remember the date now, but they all knew about this matter."
According to George’s testimony, the arrangement with Mallia involved splitting a storage commission paid by Total equally between them.
The commission amounted to 12 cents per tonne per month, with George using Power Plan funds to pay Mallia through “pay self” and “pay cash” cheques that required a second signature from his brothers.
George claimed that when Mallia was hospitalised following an accident in 2000, he was directed to deal with Tarcisio Mifsud, Enemalta’s Head of Finance, who allegedly told him to hand over Mallia's share directly to him. Tarcisio Mifsud had his acquittal confirmed by the Court of Appeal in 2023, after the court “seriously doubted” George Farrugia’s testimony about him.
According to George, payments that had previously been intended for Mallia were then redirected to Mifsud, who allegedly promised to pass on Mallia’s share.
The court also heard that, around this period, George expanded the arrangement beyond Enemalta to the Mediterranean Offshore Bunkering Company Limited (MOBC). He began invoicing “consultancy fees” through Power Plan and later through Aikon Limited, a nominee company he set up in 2004.
To fund these cash bribes, George testified that he regularly drew money from Power Plan’s accounts using "pay self" or "pay cash" cheques. Because the company’s bank mandate required two signatures, he had to get his brothers to sign off on them.
"There would be cheques that I and someone of my brothers would sign, where it would come out as 'self' or cash, we would cash it, and I would take him the cash," George told the court.
He added that when Power Plan's Ħamrun office was active, Raymond Farrugia was the most frequent co-signatory, whereas Salvu Farrugia signed most of the cheques when they moved to Qormi.
The Swiss accounts
According to George, the company’s auditor eventually caught on to the irregular cash withdrawals and warned the directors during a board meeting that they could not keep pulling undocumented cash out of the business.
George testified that this warning prompted a private discussion among the brothers: "These payments could not, that is to say, continue to be made. In fact, there was talk even about whether we were going to continue with that work... I remember even telling them, 'now I will see how I can sort it out.' I remember we had also spoken and there was an agreement that I could take 20% of the income related to the oil business."
To bypass the auditor's scrutiny, George set up a nominee company called Aikon Limited in 2004 and opened a Swiss bank account with Rothschild Bank in Geneva.
He admitted to the court that he was not entirely open with his siblings: "I admit that I wasn't transparent enough with my brothers, but what happened was that part of the money was going in there, and the money from here [Power Plan] was no longer being touched... they knew that people were being paid, and who was being paid. Now, if you know that people are being paid and no money is coming out of Power Plan, it has to be coming from somewhere."
The Tancred Tabone years
Between 2003 and 2005, George Farrugia testified that the alleged payments continued during the chairmanship of Tancred Tabone at Enemalta and MOBC. He claimed that Tabone requested commissions connected to gas oil tenders, and that payments continued until around 2006, when they stopped because no further requests were allegedly made.
The alleged payments described by George included; cash payments to Alfred Mallia, with George estimating that the total amount shared with Tarcisio Mifsud was around Lm40,000; a 50 per cent commission arrangement with Frank Sammut; the SsangYong Korando vehicle allegedly provided to Sammut’s son; and payments allegedly made to Tancred Tabone, including $20,000 delivered at the Hotel President Wilson in Geneva, a Lm10,000 cheque and a Lm1,000 cheque.
George testified that Tabone had allegedly requested money linked to fuel tenders, although these claims remain disputed and have not resulted in a final conviction.
'He was robbing us blind'
The five accused brothers vehemently denied any knowledge of the bribery, telling the court they had been completely left in the dark by George, whom they trusted implicitly.
Emanuel Farrugia testified that he spent his days managing the taxi and chauffeur services and had absolutely nothing to do with the oil business.
He recalled that whenever the brothers tried to bring up Power Plan's performance during their rare meetings, George would shut down the conversation: "George would raise this point, this discussion, that we are always working for nothing here... I asked him how many people were working with us, because I didn't even know... I didn't even know how much a tank of oil sold for, nothing. And he gave no answer, just silence."
Salvu Farrugia backed up this account, testifying that George actively hid the true nature of his dealings.
Whenever Salvu asked George if they should try to pitch for Enemalta's lucrative oil tenders, George would brush him off: “He would tell me, 'Oh, there are sharks out there for that work, there are sharks for it, you don't stand a chance.'"
Addressing the "pay self" cheques bearing his signature, Salvu explained that George took advantage of their sibling trust.
"He would come to me with an empty chequebook and tell me, 'sign a few cheques for me so that if I need to pay someone, I will have the cheque ready.' ... I always trusted him and, that is to say, I never questioned him."
Raymond Farrugia, who managed the group until 2009, testified that George was always "too busy" to provide management accounts or financial updates.
"His meetings were completely devoid of substance because when you met, his phone would ring and he would run off to his office or step out of the room... he never spoke about these things in front of us."
He said that George’s handling of the oil business was something kept in a “black box” where George was “always busy” and often absent from group meetings.
How the scheme unravelled
The brothers testified that they only discovered George's double-dealing in 2010—three years before the scandal broke in the press. MaltaToday had revealed the scandal in January 2013.
While George was away in South Africa attending the 2010 FIFA World Cup, his nephew (Anthony’s son) and corporate consultant Anthony Debono, who had been brought in to restructure the struggling group, began digging into the company's IT server.
For the FIFA World Cup trip, Raymond Farrugia testified that George invited him to fly out for the final, but Raymond declined, jokingly telling him: “No way I’m flying out for the final, mela jien iċ-Ċisk?”
Raymond later discovered that the expensive trip, which involved stays at top hotels and attendance at six World Cup matches, had allegedly been financed using company funds. His nephew testified that he had grown suspicious of George's lavish lifestyle, which included buying luxury items, classic cars, and high-end properties.
He also noticed massive discrepancies between the physical oil releases Power Plan was receiving and what was actually being invoiced in the company's management accounts.
One day, George left his iPad unlocked on his desk. Christopher opened it and found an invoice that looked identical to Power Plan’s, but carried the name of Aikon Limited and bank details for a Swiss account in Geneva.
A deep dive into the company's server by IT experts revealed that George and his wife, Catherine Farrugia, had been running a parallel invoicing system.
"The ratio was one invoice for Power Plan and ten for Aikon," Christopher testified. "He was using Power Plan's letterhead but inserting Aikon's Geneva bank details at the bottom."
Christopher also testified that, during the period between 2008 and 2010, Power Plan held only around six board meetings.
He recalled one meeting being a “fjask kbir” after George informed his brothers that he had created a separate traffic management company with Transport Malta and had unilaterally granted it a 20% shareholding.
The court further noted that on 13 March 2008, a Greek national named George Statis was appointed as a director of Power Plan, before resigning on 29 March 2010, only months before George Farrugia’s departure from the company.
Armed with this evidence, the brothers confronted George in October 2010, demanded his immediate resignation, and subsequently filed a €7 million civil lawsuit against him to claw back the stolen funds.
The brothers testified that they only learned about the bribery allegations years later through the media and the subsequent criminal proceedings.
The SsangYong Korando bribe
The prosecution had also alleged that the brothers were complicit in bribing MOBC official Frank Sammut by gifting him a red SsangYong Korando, valued at Lm13,900 (€28,000), which was imported by the family's car dealership, J.F. Motors, and paid for by Power Plan.
However, this allegation fell flat when Frank Sammut himself took the stand.
Sammut chose to speak, presenting six original VAT receipts and a hire-purchase agreement proving that he had actually bought and paid for the car himself.
Sammut testified that he had made regular payments directly to George Farrugia to settle the debt, debunking the prosecution's theory that the vehicle was a freebie handed over as a kickback.
The court also heard evidence regarding a traditional Maltese wall clock (arloġġ tal-lira) gifted to former Finance Minister Tonio Fenech.
The watch had been handmade by Raymond Farrugia’s wife, but it emerged during the investigation that the materials, or the watch itself, had been paid for by Power Plan Limited. Its value was estimated at between Lm400 and Lm500 (€930 to €1,160).
George Farrugia’s 'selective' memory
The prosecution’s case rested almost entirely on the testimony of George Farrugia with the magistrate calling out what she described as his selective approach.
"The court cannot help but notice that in his testimony, George Farrugia was selective about what he said," the magistrate observed. "While he testified in great detail about certain things, he forgot other highly relevant details."
For instance, George claimed that Power Plan’s auditor had repeatedly warned the directors during board meetings to stop drawing cash and issuing "pay self" or "pay cash" cheques without supporting invoices. Farrugia asserted that this warning prompted him to set up a Swiss-banked nominee company, Aikon Limited, to "park" funds and pay off officials with the tacit approval of his brothers.
Yet, when pressed, George could not even recall the name of the auditor or the accountant who supposedly gave this advice.
The court noted: "He forgets the name of the auditor and accountant who told them to stop the practice of 'pay self' and 'pay cash'... and this is when he links the incorporation of the nominee company with the advice of this nameless auditor."
No 'common design'
In evaluating the mountain of evidence, Magistrate Micallef Stafrace noted that for a charge of complicity to stick, the prosecution had to prove beyond reasonable doubt that there was a "common design", a shared criminal intent, between the accomplice and the principal offender.
The court found that the prosecution had failed to meet this threshold.
First, the court said that the prosecution’s entire case rested on the word of George Farrugia, whose testimony was highly selective and completely uncorroborated.
The court particularly highlighted that George never produced the Swiss bank statements that could have shown the flow of money through Aikon, despite his presidential pardon requiring him to cooperate fully with investigators.
The court pointed out that despite his presidential pardon requiring him to be fully transparent, George had stubbornly refused to present his Swiss bank statements, which would have shown exactly where the money went.
Second, the court noted that there was absolutely no evidence that the accused brothers had ever met or had any contact with the officials George was allegedly bribing.
Third, the court accepted that the brothers had operated on a system of “complete sibling trust”, which, while corporate negligence, did not equate to criminal intent.
"Certainly, signing blank cheques is not a good practice, but this does not mean that it leads to a finding of guilt for complicity in crimes of corruption," the magistrate ruled.
Magistrate Micallef Stafrace also pointed out that the prosecution had failed to bring forward key witnesses, such as Trafigura representative Tim Waters or consultant Anthony Debono, despite the case dragging on for years.
She also noted that the two public officials George claimed to have bribed, Tarcisio Mifsud and Ray Ferris, had already been cleared of all charges by other courts.
Lawyers Joe Giglio and David Farrugia Sacco appeared for the acquitted Farrugia brothers.