Alberto Chang-Rajii extradition to be decided before 7 April

The legal saga over the extradition of Chilean businessman Alberto Chang-Rajii will be decided on or before 7 April, a court has announced today.

Chang-Rajii was arrested in Sliema last December following an extradition request by the Chilean authorities, who want him to face trial for a host of charges, which include money laundering and running a Ponzi scheme in the South American nation. He claims the charges to be part of a campaign by the Chilean prosecutors against wealthy Chilean citizens.

Chang's Grupo Arcano had promised investors returns of up to 1.5% a month for an investment of 200 million pesos ($300,000), according to news organisation Bloomberg, but none of the investors in the group’s eight-year-old fund – which offered some clients guaranteed returns as high as 36% a year – had received either their money or the promised returns when they fell due. Arcano Group CEO Jorge Hurtado had quit his post, claiming the company to have been a pyramid scheme that paid off old investors using new investors' money.

In his closing submissions, Chang-Rajii's Maltese lawyer Stefano Filletti demanded to be shown more than just the accounts and transactions of the alleged Ponzi scheme. “Show me these transactions have the basic elements of actus reus and mens rea according to law, not that people put money here and there.”

Filletti disputed the $100,000,000 figure vaunted by the prosecution, saying that “when push came to shove, the Chilean prosecutor came up with a figure of $7.7million in his explanatory note,” adding that several other basic requirements for the man's extradition were missing.

“Fraud and money laundering are being put forward to this court not on the basis of evidence but on the basis of argumentation. When my colleague says that a transaction was not economically rational to the Chilean authorities, that is a subjective interpretation. Is this how you prove a crime?”

The defence said it was not interested in the Chilean prosecutor's “gratuitous conclusions,” and that proceedings in Malta are regulated by the Maltese Criminal Code. “We do not apply the law of Fiji or the Sandwich Islands.”

The statements released by the Arcano Group's officers had all said the company had enough assets to settle its debts, argued Filletti. “Chang is a respectable person, no law was breached and the company had enough to pay all the creditors. So much for a Ponzi scheme.”

The remarks came after the Attorney General's office, represented by lawyer Vincienne Vella, closed its submissions yesterday.

The evidence only had to satisfy the court of committal, Vella argued, that the information received about the person wanted for extradition gave rise to a prima facie case.

“Otherwise we would have a trial before this court and this is not the case. The function of this court of committal is twofold. To see if the requisites of extradition have been satisfied – whether the crime is extraditable, which has already been satisfied, and whether there is a prima facie case.”

Malta and Chile are signatories to the Palermo Convention on Transnational Organised Crime, she said, adding that the minister had used his legal prerogative to choose to apply the Palermo convention.

Organised crime is defined under the Palermo Convention as “a structured group of three or more persons, existing for a period of time, acting in concert with the aim of committing one or more serious crimes or offences.” The amounts paid to investors of the Arcano group was not profits from the group but the amounts from newer investors, Vella argued. “They knew this was going on and allowed it to proceed and in so doing fell within the definition of organised crime under the Palermo Convention.” There were family members, relatives, friends in this group, she said,

Vella rebutted the defence's claim that money laundering that took place before 2015 could not be the basis of the extradition, as it had not been a criminal offence before then.

“Anti-money laundering laws came into force in 2003 and have been amended several times since then.” Chang-Rajii is wanted to face charges of fraud, securities crimes, violations of the banking law and money laundering she said, arguing that the fact that Chang-Rajii was head of Grupo Arcano and that only a small fraction of the monies received were invested in the companies suggested wrongdoing on his part.

The Court summed up the Attorney General's argument, as being that this was a typical money laundering scheme for the proceeds of fraud and noted that the legal basis for the extradition request was the Palermo Convention.

“Chang-Rajii is requested in Malta by Chilean authorities who are requesting other persons who are involved in Chang-Rajii's companies...Looking at their statements, these individuals seem to be passing the buck. They are claiming 'it’s true that we worked for Chang-Rajii, he used to administer and give instructions and so on'....the impression is that they were acting on his behalf. You are basing your prima facie case on the basis of these declarations.”

Vella replied: “In fact they were presenting documents [showing amounts of money] to clients asking them to invest money. One of the employees, an accounts clerk, said that she realised that something was wrong. When she saw the figures, at one point she saw an amount and afterwards realised that the amount had dropped drastically. She had asked...what was going on and the answer was that Chang-Rajii was investing abroad and this was the reason. This shows that these people were helping him out.”

Defence says money laundering and fraud charges "fall flat"

“We have laws and the rules for a reason,” the defence argued. “It is only through the procedural guarantees of the law that a fair trial can be held. There are no shortcuts or short circuits, we are servants of the law in order to be free. This is what we are trying to convey to the court. We cannot bend procedural rules.”

“The prosecution is contending that once a certificate (confirming the existence of an arrangement with any country and stating its term) is issued by the minister this is a definite agreement...

“Where is the order of the minister naming Chile as a designated foreign country for the purposes of the Act? Where is the declaration of the minister?

“This is what the law demands. I am asking the prosecution to confirm that the legal requirements are satisfied.”

“I presented everything to the minister and he signed, ” the prosecutor retorted.

“The Prosecution tells us that there are two instances where the Palermo convention is applicable: money laundering and serious organised crime. The definition of serious crime is intrinsically linked to something else. This is the crux of the issue. It is only extraditable if it is transnational in nature and if linked to a criminal group of three persons acting in concert for a period of time.

Today she told us that Chang-Rajii acted in concert with three representatives. In her previous submissions, she said that all the witnesses testified that the person who took the decisions at the company was, basically, him. Not him and his executives, him. So why are you now saying that it's him, his family, his friends?”

The description of the crimes in the charges referred only to “the defendant,” Filletti pointed out. “Where is the concerted action? Where is the structured group?”

“It is up to the prosecutor to prove that he had established that he had the legal basis for extradition. The highest organs of Chilean state communicated and requested the grounds. There was no mention of transnational crime or organised groups. The Chilean authorities gave you authority to proceed on a number of grounds. This is clear.”

“They want him for the acts he perpetrated. So don't come and say that because they were friends and family and that they were a band of criminals. You've established the legal basis for the extradition exists. Prove it.”

 He railed against the addition of organised crime to the charges for which Chang-Rajii stands to be extradited. “You cannot do this. If there is complicity you must find the Chilean equivalent and add it...where is it here? Do you shift things at the last moment? You do not have the authority to proceed on the basis of complicity, organised crime and therefore all the offences of serious fraud fall flat. All of them.”

The lawyer pointed out that the offence of money laundering cannot stand alone but requires a predicate offence, a previous crime. “While it can be punished singularly, you cannot find guilt without first establishing a predicate offence.”

The Palermo Convention is not meant to deal with domestic crime, but with much more serious, organised crime, he said. “It is not there to punish corruption or bribery but organised crime. This was the raison d'etre of that convention. It creates a set of core offences which are serious enough to merit extradition and with respect to other crimes in the criminal code, you can only extradite if you elevate the crime to the level of organised crime.”

“You know what we heard today? This is a criminal organisation because they are friends or family. I haven't been told when it was set up, how it was setup, how the intended to make benefit, I haven't heard anything about the structure of the group.”

There was “absolutely no legal basis” for the extradition, Filletti argued, accusing the prosecution of “pushing the envelope” by trying to apply the organised crime provision.

“With respect, this court and prosecutor do not have the authority to establish whether there was an organised group because the instruction refers to the defendant alone. Everything falls through, except money laundering, but if we exclude the predicate offence it also falls through. You can't have money laundering in a vacuum.”

Maltese law requires that the offence is punishable by over 12 months in Malta and other country. “My warrant doesn't allow me to interpret foreign legislation. I cannot say this law says such and such. I can only say that about the laws in my jurisdiction.” This extended to the judiciary of Malta, he said, who cannot interpret and apply foreign legislation.

“If you were not a Maltese legal practitioner and you were interpreting a law about ne bis in idem which Malta has a particular interpretation of. If you were an Italian lawyer would you interpret it the same way? No. By the same token, we cannot interpret foreign legislation.”

The prosecution must show to the satisfaction of a court the essential ingredients of an offence is present, argued the defence. “Prior to that, you must at least show how the offence was committed. There is no document evidence of a ponzi scheme other than the submissions of a prosecutor. To date I do not know how the movement of funds from one account to another constitutes a violation of the Chilean banking act or the Securities and Exchanges act.”