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local
news
Massive laundering scandal traced
back to Malta
Close links have been established between a massive money laundering
and share fraud scam involving off shore "shell' corporations,
a London law firm and a high profile Maltese company - whose management
encompasses both sides of the political spectrum.
MaltaToday has established that one director of a renowned Maltese
company – a foreign national - was, in September 1999, arrested
in connection with money laundering charges.
However, it has also been revealed that one of the individual's
closest relations was also involved in an enormous money laundering
and stock fraud scam involving billions of US dollars.
The scam, which ranges from Liberia to London and from Russia to
New York, involved the setting up of 'dummy' corporations used to
defraud investors in thinly traded over-the-counter securities.
Particularly relevant, however, is the fact that the local company,
in which this individual's close relative is a director, is significantly
involved in the registration of foreign companies in Malta.
The director's relation was accused of setting up off shore corporations
through which corrupt stockbrokers would buy and sell unregistered
stock in US "shell" companies in order to drastically
manipulate prices to their advantage – from outside the jurisdiction
of the New York securities market.
This individual, a British national and former employee of a London
law firm, has been accused of enterprise corruption, securities
fraud and falsifying business records in his capacity as counsel
to a New York stockbroking firm, while possible connections to Russian
organised crime figures have also surfaced.
Also accused was a partner in the law firm at which the individual
had worked, who was also a London magistrate for 10 years.
Investigators had conducted a 10-month inquiry into suspicious securities
companies registered in Liberia and the British Virgin Islands,
while operations were based in New York and managed from London.
Meanwhile, a joint effort by British and US authorities had led
to extradition proceedings for a New York trial.
The case had severe repercussions on Wall Street, when a number
of traders were convicted of defrauding investors in thinly traded
over-the-counter securities and led regulators to initiate wide-spread
efforts to combat fraud against individual investors.
It is expected that the scandal is highly sensitive, as enquiries
into the matter with the Attorney General's office have been met
with a brick wall, a far cry from the judiciary's normal response
to matters concerning issues as serious as investigations into alleged
drug barons.
Meanwhile, when contacted by MaltaToday, foreign officials remained
cagey over speculating on cases that might be currently under investigation.
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