Bank of Valletta denies reports of legal action over Gaddafi credit card

WSJ reports that representatives of the Libyan government said BOV should return tens of millions of dollars stolen from the state during Gaddafi’s reign for ignoring fundamental rules designed to prevent Western banks from doing business with corrupt officials or facilitating money laundering

Libyan dictator Muammar Gaddafi and his son Mutassim were both killed in the 2011 revolution
Libyan dictator Muammar Gaddafi and his son Mutassim were both killed in the 2011 revolution

Bank of Valletta is denying that it is a party to any legal proceedings concerning the alleged use of a credit card issued by the bank to the son of Libyan dictator Mutassim Gaddafi.

The bank said it will not divulge any information regarding any of its customers. “BOV has always acted, and will continue to act, in strict accordance with any United Nations directives that may be relevant to the reported case.”

According to the Wall Street Journal, Gaddafi – killed during Libya’s 2011 revolution – deposited millions of dollars at BOV, which issued him with a credit card for his shopping binges in Rome, Beverly Hills and Cannes.

The WSJ claimed that in legal filings in Malta, representatives of the Libyan government said BOV should return tens of millions of dollars stolen from the state during Gaddafi’s reign.

“Libya accuses Bank of Valletta of ignoring fundamental rules designed to prevent Western banks from doing business with corrupt officials or facilitating money laundering. The bank stood to profit from the relationship because his deposits were a cheap source of funding and his massive credit-card transactions generated fees.”

In comments to the WSJ, BOV’s chief executive Charles Borg said that neither the bank nor its executives are under investigation for any wrongdoing related to Gaddafi’s accounts. He said the bank applies strict due diligence on its customers.

One of BOV’s main shareholders is UniCredit, which is partly owned by Libya’s sovereign wealth fund and central bank, which said it is under U.S. investigation for possible sanctions violations, unrelated to the situation in Malta.

Bank of Valletta isn't accused of breaching sanctions. Instead, the Libyan government says the bank violated so-called know-your-customer rules that should have prevented it from opening an account for Gaddafi in the first place.

The WSJ said that Gaddafi at times had as much as $60 million stashed in his Bank of Valletta accounts, according to legal filings. He used his Bank of Valletta Visa Platinum credit card for lavish spending, sometimes more than €100,000 according to card statements reviewed by The Wall Street Journal.

On April 10, 2009, for example, he spent more than €21,000 on a Rome shopping spree, making big purchases at Versace and Dolce & Gabbana. The next day, he racked up an additional €8,300 of charges at stores including Hermè, La Perla and a Giorgio Armani boutique, before shelling out €3,300 at a bar and nightclub.

Gaddafi started opening accounts at Bank of Valletta in 2002, the documents show. The accounts were opened under the auspices of Malta-incorporated companies that he controlled. The accounts' assets swelled to €60 million in early 2011, according to the legal filings.