Swedish authorities request Maltese man in connection with complex €196 million VAT fraud

A Maltese businessman is contesting a request that he be deported to Sweden to face charges of fraud, tax evasion and money laundering.

Food importer and wholesaler Mohan (also known as Michael) Bharwani, 57, from Sliema, appeared before Magistrate Abigail Critien on Thursday, after having been arrested on the strength of a European Arrest Warrant issued by the Swedish authorities.

He was taken into custody during an operation involving police forces in Albania, Austria, Cyprus, Croatia, Czechia, Estonia, Germany, Hungary, Italy, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Sweden and the United Kingdom, who carried out more than 180 simultaneous searches in a bid to arrest the suspected organisers of a complex VAT fraud scheme, which allowed them to defraud up to €195 million.

In court, Police Inspector Roderick Spiteri exhibited a number of documents, including two valid Maltese passports issued to Bharwani, who confirmed that he was the same person indicated in the arrest warrant.

Asked whether he was consenting to being extradited, Bharwani’s lawyers replied that he was not.

Lawyers Stefano Filletti, Giannella De Marco and Maurice Meli, assisting Barwani, contested the validity of his arrest. 

Superintendent Mario Cuschieri from the Police International Relations Unit took the witness stand to testify about what led to Bharwani’s arrest. “Yesterday the Attorney General informed us that she had received an EAW from the Swedish authorities in the name of the person in the dock today.”

He had gone to an address in San Gwann, where Bharwani had already been accompanying police officers carrying out a search there, and arrested him.

”He explained [to the police] that he had only offered consultancy services to the company in question,” Cuschieri said, adding that it was explained to Bharwani that the Maltese police could not examine the merits of the case he was wanted for abroad.

Under cross-examination by De Marco, he confirmed that no local arrest warrant had been issued, and that the arrest had been carried out only on the strength of the Swedish European Arrest Warrant. The superintendent said that he had been aware that a search was being carried out at the address at the time, but said that he was not aware of a previous search carried out on 24 February, which De Marco also asked about.

Making his submissions about the validity of the arrest, Filletti said the law required the EAW had to be signed by a judicial authority in the requesting country, which would then be certified by the Attorney General in Malta, as having been issued by a judicial authority. 

“The certificate is proof of its contents but is not incontestable,” argued the lawyer. “A look at the EAW shows the issuing authority is the Swedish Economic Crime Authority, and it was signed by a public prosecutor, and the contact details listed were of the Swedish police. One must examine how the AG reached its conclusion, because it is not issued by a court…” Filletti submitted. “Is a prosecutor a judicial authority?” asked the lawyer, emphasising the distinction between a legal and a judicial authority and saying that this raised doubts about the validity of the EAW.

When the police execute an EAW, they had to do so on the strength of a local arrest warrant, issued by the duty magistrate, argued the defence. “It is clear that this step was skipped and we do not have a local arrest warrant for Mr Bhaswani.”

“The law obliges the AG to ascertain that the authority issuing the EAW in Sweden was authorised to do so,” added De Marco. “A European Arrest Warrant is issued by a judicial authority of a scheduled country. The AG is not empowered to ascertain whether the authority is a judicial one,” said the lawyer, inviting the court to look at the warrant itself to see who issued this warrant - “Swedish Economic Crime Authority, I take it, like our FCID. This is not a judicial authority. These are the police. The police who are investigating in Sweden.” The evidence in hand showed that the warrant had been issued by a police officer, a prosecutor, and not a judicial authority, argued the lawyer.
De Marco argued that the legal elements for a valid warrant were “all missing.”

“This warrant was not issued by a magistrate or the Swedish judicial authorities and this is why we are attacking the arrest, because we do not have a valid local or European arrest warrant.”

But the magistrate disagreed, pointing out that the court had in hand a certificate, issued by the Attorney General Victoria Buttigieg.

Superintendent Cuschieri retorted that the judicial authority issuing the warrant is listed on the warrant as the Swedish Economic Crime Authority. “So under Swedish law it is the judicial authority.” Cuschieri argued that the references to the Swedish police were merely administrative in nature.

“The AG’s certification must be read in the context that it was sent to it by a competent judicial authority in Sweden that has the function of issuing those documents. The Eurojust website indicates who the Swedish judicial authorities are… The law is clear and we followed the law.”

The court, after hearing the submissions and reading the law, declared the arrest to be valid.

The defence requested bail, calling up the man’s wife and son to declare that they were prepared to act as third party guarantors for the requested person, which they did.

But Inspector Spiteri objected to bail, describing Bharwani as a flight risk, pointing to the fact that he had been mentioned in a Europol press release about the multi-million euro VAT fraud scheme.

Filletti pointed to the man’s ties to Malta and cooperation with the police. “He was born in Malta, lives here, has a business here, children here, his mother here. What is he going to do going abroad? He has more ties to Malta than I do. Where is he going to go? Dubai or Singapore? As soon as he approaches a border in Europe he would be arrested. It is unfair to claim he is a flight risk without justification. Additionally this is about a VAT investigation in Sweden about facts which happened in 2018, and only now are the Swedish authorities waking up?”

De Marco added that Bharwani had every opportunity to abscond since 2018, but had not even attempted to do so. Stressing his good conduct and family ties to Malta, the lawyer pointed out that “when you have a 91 year-old mother you are particularly careful about leaving your country.”

The prosecution had to justify and back up their objections to bail to the level of probability and not just say that he might abscond, submitted the lawyer. “We are talking of alleged VAT fraud by a company for which he was a consultant to, not even an officer of.”

The court, however, refused bail at this stage, both in view of the nature of the charges against him as well as what it described as the “real risk” of him going into hiding or absconding from Malta.

As none of the man’s seized electronic devices had been exhibited in court, the  magistrate said she could not rule on the defence’s request that they be returned to him, precluding him from building his defence.

Inspectors Shaun Friggieri and Roderick Spiteri represented the Commissioner of Police. Also present for the sitting was lawyer Martin Sammut from the European Public Prosecutor’s Office.