Swedish police drop investigation against Tonio Fenech and Falcon directors

A fraud investigation into Maltese pension fund Falcon continues but prosecutor says they will not charge former PN minister Tonio Fenech and co-directors of the pension fund

Former finance minister Tonio Fenech
Former finance minister Tonio Fenech

A criminal investigation into the directors of the Maltese pension scheme Falcon Funds, has been closed by Swedish investigators.

Police prosecutor Arne Fors of Stockholm police, said the Economic Crimes Authority had freed Falcon’s directors Tonio Fenech – the former Nationalist finance minister – Joseph Xuereb and Ian Zammit, of any suspect fraud offences. “What they are saying is that they have been misled about these investments. I must be able to show that there was a purpose for crime,” Fors told the Swedish press.

Falcon Funds offered Swedish pensioners a pension fund on the country’s premium pension platform, but was later kicked off by the pensions authority over suspicions of investments in illiquid assets and illegal transfers of savers’ cash.

Falcon Funds was taken under controllership, and its investment manager Temple Asset Management fined €612,000 for 23 breaches of investment rules. Falcon’s directors were given an MFSA reprimand were prohibited from accepting any new appointments in entities or for activities licensed by the MFSA for a period of two years.

But the Swedish investigation remains ongoing with some 15 suspects still being investigated, while the Swedish pensions authority says it is keeping the door open for legal proceedings against the Maltese.

The police has also failed to track any of the money suspected of having been dispersed across the globe.

The Swedish pensions authority had claimed Falcon was unable to pay back €247 million in savings because of ‘major investment fraud’. The MFSA in October declared that the scheme “failed to act honestly, fairly and with integrity in the best interests of its investors.”

The MFSA also said Falcon Funds did not obtain a reliable valuation of “illiquid securities”, which included questionable investments that Temple Asset Management made to benefit a mysterious Swedish trader – Emil Amir Ingmanson.

John Farrell's (left) Temple Asset Management had its license suspended by the MFSA and was fined €612,000 for its role in the Falcon Funds fiasco. One of the pension fund's directors was Tonio Fenech (right). The fund's investment decisions were principally managed by the Temple, which is now being sued by Falcon Funds
John Farrell's (left) Temple Asset Management had its license suspended by the MFSA and was fined €612,000 for its role in the Falcon Funds fiasco. One of the pension fund's directors was Tonio Fenech (right). The fund's investment decisions were principally managed by the Temple, which is now being sued by Falcon Funds

Ingmanson is suspected of having been planning to take over Temple’s role as investment manager for Falcon Funds, presenting a major conflict of interest.

Temple, run by John Farrell, was the investment manager for the pension fund. Temple was said to have not cooperated with the MFSA in an open and honest manner, had numerous reporting failures, failed to formulate forecasts and analysis of illiquid assets, due diligence of investments, and did not ensure measures to avoid conflicts of interest.
Falcon Funds’ directors have taken up a battle in court, accusing Temple Asset Management of having invested over €10 million of savers’ cash in what turned out to be an ‘advance’ to Emil Ingmanson and his London company.

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