Updated | Remote gaming accounts in Malta used for money laundering

The use of Maltese bank accounts and international wire transfers have featured in the vast majority of suspected transactions reported to the police and Malta’s financial intelligence analysis unit (FIAU) in 2013.

29 suspected offences were reported to the police in 2013, the highest amount since 2008, the majority pertaining to suspected fraudulent activity.

The FIAU, which fights money laundering, said the most popular instances of suspected offences involved the use of Maltese companies and banks by foreign nationals, as vehicles to launder the proceeds of criminal funds generated outside Malta

“The main trend observed during the year as that most cases referred to the Police for investigation involved the use of a company registered in Malta having at least one non-resident foreign beneficial owner. Once again, the use of Maltese bank accounts and international wire transfers featured in the vast majority of the cases reviewed,” the FIAU said,

In some cases, the subjects availed themselves of the services of Maltese professionals and service providers. In these cases these entities were suspected of having been used unknowingly and unwittingly to launder criminal funds.

“As observed in 2012, the use of companies licensed by the LGA (Lotteries and Gaming Authority) to operate in the remote gaming sector also featured in a number of cases referred to the police for investigation. Similarly, companies licensed or authorised by the MFSA (financial services authority) to provide services were identified as having potentially been used to disguise the origin of criminal proceeds,” the FIAU said.

In eight cases referred to the police in 2013, one or more non-resident foreign nationals set up Maltese companies, opened a bank account in the name of the companies, for the receipt of substantial funds from bank accounts in foreign jurisdictions to then transfer these funds to other foreign bank accounts.

The Maltese companies would form part of a larger multinational company structure, set up intentionally to layer the proceeds of crime generated in foreign jurisdictions.

The LGA told MaltaToday that it works closely with the FIAU and law enforcement agencies whenever suspected money laundering transactions are brought to its attention through intelligence reports. All intelligence reports are investigated and reported to the police for further investigations when appropriate.

"The report refers to suspected transactions and not concrete proof of actual money laundering or criminal activity taking place in the gaming industry," LGA chariman Joe Cuschieri told this newspaper. "As part of our anti-money laundering compliance procedures and controls we continuously monitor our licensees for any suspected transactions to ensure that Malta remains a reputable jurisdiction for remote gaming.

"Furthermore, as a supervisory authority, we comply with all domestic anti-money laundering regulations by submitting suspicious transaction reports to the FIAU. The LGA fully cooperates with the police when the latter requests information whenever there is an ongoing criminal investigation and also when the police are requested from foreign law enforcement authorities to provide information regarding gaming companies based in Malta."

Cuschieri said that the LGA has its internal processes to carry out due diligence on all applicants. "Furthermore, individuals involved in the gaming sector are closely kept under review and monitored to make sure that the fit and proper test is satisfied at all times. It is pertinent to point out that Malta has a strong reputation in this industry and a number of EU member states use Malta as a best practice model to launch remote gaming regulations in their own countries."

Local providers would have also assisted the suspects in setting up the companies, and providing them with fiduciary services or directorships.

Intelligence obtained from the FIAU’s counterparts in another case provided substantial indications that the Maltese companies and bank accounts had been used to defraud hundreds of individuals in foreign countries and to subsequently launder the illicit proceeds.

Cases involved the suspicion of the laundering of profits of illegal gambling through cash deposits in a bank account followed by substantial wire transfers to online gaming companies registered outside Malta.

Three cases forwarded to the police involved the use of substantial amounts of funds in cash suspected to be the proceeds of crime, for the purchase of luxury items by individuals having a history of proceeds-generating convictions, the use of potentially forged withdrawal vouchers to substantiate cash deposits, multiple deposits on the same day at different banks, and unreasonable explanations on the source of the funds upon deposits being made.

A number of cases involved the use of remote gaming accounts held with remote gaming companies licensed in Malta to launder the proceeds of crime. Cases varied from the use of prepaid cards to deposit potentially illicit funds in the remote gaming accounts with eventual withdrawal taking place through bank accounts; to the attempt to transfer funds held in the account to other persons, transferring the ownership of the proceeds of the criminal activity.