Updated | OLAF linked Dalli to Ponzi scheme in 2016, Dalli says leak concides with Kessler defamation case

OLAF presented Bahamas investigation to Attorney General in 2016, police say investigations are still ongoing

matthew_vella
Matthew Vella
12 May 2017, 9:48am
Last updated on 12 May 2017, 11:56am
John Dalli
John Dalli
The EU’s anti-fraud office OLAF presented findings of a fraud scheme that implicated the former European Commissioner John Dalli, to the Maltese Attorney General in 2016 – the New York Times reported.

The EU investigators were said to have linked Dalli, 68, to a Ponzi-like scheme that duped investors of at least $1.5 million.

“The investigators presented their conclusions in a damning report to the authorities in Malta last summer, according to interviews with people involved in the case and to records obtained by The New York Times,” the newspaper said.

READ MORE Dalli wades through miasma of unsubstantiated allegations

But nothing appears to have been done. According to Dalli, who spoke to the New York Times by phone, the police investigated the case and found nothing. “Listen, listen, listen. That case has been fomented by Kessler. A false report has been sent to the Malta police which has been investigated, O.K., and nothing has come out of it.” He then hung up.

His account was not supported by other officials, however. Attorney General Peter Grech said that his office would refer such findings to the police if there were “the possibility of criminally sanctionable conduct,” but he declined to discuss the Dalli case.

A spokeswoman for the Maltese police, Louise Camilleri, said that “investigations are still ongoing.”

And an FBI agent in the unit’s South Carolina office, Donald A. Wood, was said to have “struggled to get information from Malta. ‘That’s what we’re looking for’,” he said.

Dalli says newspaper report 'timed'

In a statement, John Dalli said news of the OLAF investigation in the New York Times had coincided with the start of the judicial process against Giovanni Kessler, the OLAF director, and Swedish Match, whom he has filed a report for defamation and abuse of power wiyth the Belgian police.

The court case started yesterday in the Court of First Instance in Brussels.

"It was adjourned after my lawyer filed a petition for the court to order the examining judge in Brussels to perform supplementary duties - that is to intensify his investigation. The Commission's obstruction of the investigation by not granting the immunity of OLAF staff and only partially lifting the immunity of Kessler has prevented the Belgian police from making the investigation that they would have wanted," Dalli said.

Dalli accused OLAF of breaching confidentiality rules, using "connections they have in the media, including hate bloggers in Malta and journalists of newspapers like New York Times in Brussels to spin stories that they leak to them."

"Now that Kessler is under investigation himself, he is again resorting to defamatory media stories in an attempt to discredit me."

Investors speak out

John Dalli was forced to resign his post as EU Commissioner when OLAF claimed he was aware that his associate Silvio Zammit had solicited a €60 million bribe to lift a ban on the sale of snus. The allegation was based on circumstantial evidence of phone-call logs between Zammit and Dalli, and a criminal case against Zammit is still ongoing after five years - but Dalli, who denied the accusations, was never charged.

According to the victims of the alleged fraud scheme who spoke to the Times, retiree Regina L. Hayes transferred $75,000 from her savings to an investment fund, which she thought was helping Christian miners in Africa fend off competition from conglomerates. She was promised a return of 10% a year.

Investigators allege that trips that Dalli had made to the Bahamas in 2012 were related to this Ponzi-style scheme — nicknamed Gold Pool — led by Eloise Corbin, an American who lives in Malta. Investigators say that as Commissioner, Dalli and Corbin travelled together in 2011 and 2012 to a German health spa, and spent time together at a villa in the Bahamas, where he benefited from the use of an $8,000-a-month beachside villa that was not declared to the European Commission.

The investors thought their money was going to an entity called Tyre Ltd, which reported trading gold. Dalli’s daughters served on the board of the company, and its registered address was the same as a consultancy run by Dalli at his Portomaso office in St Julian’s.

During a visit to the Bahamas, Corbin was said to have introduced Dalli to Michael D. Brady, a founder of a Tea Party branch in South Carolina, as her business partner and as a European commissioner, and that “gave credibility to her and the whole investment scheme” –  Brady wrote in an email.

“We were also told that these miners were Christian and for that reason were being pushed out by the larger miners,” Brady said.

Corbin would take a percentage of the profits to help orphans in the Philippines, and it would be a “legal and safe alternative to the stock market.”

Regina Hayes, a friend of the Bradys, recalled: “[His wife] Maria got out the Bible and looked up Tyre, and they’re saying Tyre is supposed to be the wickedest city. We should have right there stopped and said, ‘We better not invest.’ But stupid us.”

Another investor, James B. Geiger, who lives in Alabama and who invested $600,000, told European investigators that the “fact that John Dalli as E.U. commissioner was involved gave me the trust” he needed.

The New York Times said investigators wrote in their report that some victims of the fraud scheme were reluctant to talk because of their involvement in fringe political organizations. Geiger, for example, is an organiser of the Republic for the united States of America, which denies the US federal government’s legitimacy.

Janie B. Moore said she invested $409,000, which she described as her life savings, and never received a dividend and recovered only $7,200 from her investment.

Suspicious company

The existence of Tyre Ltd always raised questions when news broke of Dalli’s secret Bahamas trip in 2013.

A company trading in gold and with interests in gold mining, its shareholders included Derrick Germaine, a publisher of the Georgia, US company Dake Publishing, and Thai national Thamnoon Kunajak, also known as ‘Andy’, an independent mining consultant.
Tyre described itself as a “small, but active supplier and trader with connections in many countries. We buy and export ferrous and non-ferrous metals. We deal in commodities like food, water, beef, canned food, etc. for humanitarian relief.”

Headquartered at the Portomaso office of Corporate Consultancy, the audit firm run by Dalli’s daughter Claire Gauci Borda, Tyre Ltd’s shareholding passed on to British financier Martin Zuch in December 2012.

A connection between Zuch and Gauci Borda was revealed in Kingdom Trust Traders, which is Tyre Ltd’s trading name. On its website, now defunct, KTT described itself as “a commodities marketing company with the vision of utilising business opportunities to underwrite the rescue of desperate groups of people such as hungry and abused children, human trafficking, oppressed women, and others around the world”.

Evidently, the Christian evangelical pedigree of Tyre Ltd’s shareholders continued unabated since the company passed on from Germain to Martin Zuch, who runs his own charity Give Hope International in Ethiopia and Zambia. Zuch is also a shareholder in the fledgling Jubilee Oil and Gas, another ethical commodities trader.

matthew_vella
Matthew Vella is executive editor at MaltaToday.