[WATCH] Bail for two Allied Group officials charged with fraud and money laundering

Bail given as police charge Allied Group managing director Michel Rizzo and the company’s former financial controller with fraud and money laundering linked to a grant received by Progress Press from Malta Enterprise

Allied Group managing director Michel Rizzo arriving at court accompanied by police officers from the Financial Crimes Investigation Department
Allied Group managing director Michel Rizzo arriving at court accompanied by police officers from the Financial Crimes Investigation Department

Allied Group managing director Michel Rizzo and the company’s former financial controller Claude Licari have been charged with money laundering and fraud.

The pair were arraigned in court on Thursday as part of a sprawling police investigation following the conclusion of a magisterial inquiry.

They were granted bail and spared from having their personal assets frozen. However, the assets of Progress Press, the printing subsidiary of the Allied Group, were frozen. Investigations were led by the police's Financial Crimes Investigation Department.

Several other people were charged in separate proceedings last month, including former Allied director Vince Buhagiar and former prime minister Joseph Muscat’s chief of staff Keith Schembri.

Michael Rizzo (left) and Claude Licari
Michael Rizzo (left) and Claude Licari

Rizzo, 56, and Licari, 41, were charged in relation to a grant Progress Press received from Malta Enterprise. Licari has since left the company.

The alleged criminal acts happened between 2013 and March 2019. They were accused of fraud, conspiracy to commit a crime punishable by imprisonment, false declaration to a public authority, forgery and money laundering to the detriment of Malta Enterprise.

They pleaded not guilty with Rizzo insisting he was “definitely not guilty”. 

The magisterial inquiry led by Josette Demicoli had probed allegations that Schembri paid kickbacks to Buhagiar and former Allied Group managing director Adrian Hillman over a multi-million euro deal to purchase printing machinery from his company Kasco. However, it also touched on a grant that Progress Press had received from Malta Enterprise.

In court, the prosecution led by inspectors Anne-Marie Xuereb, Joseph Xerri, Lianne Bonello and Ian Camilleri, asked the court to freeze the accused’s assets and deny them bail.

Defence lawyers Roberto Montalto and Joe Giglio objected to the freezing of the personal assets of the accused, insisting that their personal wealth was fully justified.

The lawyers insisted that the accused had cooperated with the police, so much so that one of the inspectors who testified said that Rizzo had provided more documentation than was requested of him during interrogations.

The lawyers also asked for bail to be given but the prosecution objected.

Magistrate Charmaine Galea was convinced that there was no fear of tampering with evidence and granted the two men bail on condition that they sign a bail book twice weekly and observe a curfew. They are not allowed to approach the Birkirkara offices of Progress Press and prevented from approaching the coast. Bail was granted against a deposit of €20,000 and a personal guarantee of €50,000.

The magistrate ruled that the assets belonging to Progress Press be frozen and ordered the sequestration in the hands of third parties of all the property belonging to the company.

16:17 The sitting is over. That’s it for today. Thank you for following. A summary will appear shortly. Kurt Sansone
16:17 The only difference is that Licari is prohibited from being within 100m from the coast. Kurt Sansone
16:13 Claude Licari's bail is next. His conditions are the same as Rizzo’s. Kurt Sansone
16:11 He is to sign a bail book twice weekly and observe a curfew. He is not allowed to approach the Birkirkara offices of Progress Press. Bail is granted against a deposit of €20,000 and a personal guarantee of €50,000. Kurt Sansone
16:10 Montalto suggests that the court amend the condition to state that he is prohibited from approaching sea vessels around the coast. The court adopts this suggestion. Kurt Sansone
16:09 Rizzo's bail conditions say that he cannot travel and must stay 100m from the coast and the airport. He informs the court that his house is “maybe 25 metres away from the coast” in Balluta. Kurt Sansone
16:08 The court upholds the bail request saying it is satisfied that there is no risk of tampering with evidence. Kurt Sansone
16:06 She now moves on to bail. Kurt Sansone
16:06 The magistrate orders the sequestration in the hands of third parties of all the property belonging to the company. Kurt Sansone
16:05 The court denies the request for the freezing order over Rizzo and Licari in their personal capacity and approves it over the company – Progress Press. Kurt Sansone
16:04 Magistrate Charmaine Galea emerges from chambers. We're back in session. She will begin by dealing with the request for a freezing order. Kurt Sansone
15:39 The court has retired to deliberate on its decree. Kurt Sansone
15:31 Giglio says that the witnesses had all spoken to the police alone and had gone there alone and were, in any case, far more precious to the defence than the prosecution. Kurt Sansone
15:29 Montalto says that he needed to know whether the prosecution had valid reasons to believe that Licari would try to contaminate the evidence. Kurt Sansone
15:28 The AG lawyer argues that numbers need to be interpreted by people who would testify. Kurt Sansone
15:26 Giglio remarks that these are “serious people, as is the company, as is Michel Rizzo, who provided more documentation than that required”. “The granting of bail is not the exception but the rule,” Giglio says, adding that security would be provided to ensure the accused's compliance with the court's orders. “It is inconceivable to say that these people are going to tamper with evidence.” Kurt Sansone
15:23 Giglio adds that the fears of the prosecution must be real not fictitious. “Who are these witnesses? PWC - they have already testified in the inquiry. We ourselves had asked the investigators to speak to them. These witnesses they are mentioning are persons who we had asked to be spoken to, ourselves. Secondly, the other persons are employees at Progress Press. We have been spending weeks sleeping in the archives section to give the prosecution the boxes upon boxes of evidence which show there is no valid reason for them to be arraigned. It cannot be that the same people are the reason to deny bail as this fear is not real.” Kurt Sansone
15:21 Montalto argues that lawyers knew this day was coming and despite this had continued to participate in the important manner as Xuereb has just testified. “I know that these people left the same starting point as me. We would bump into each other during the questioning. Let us be objective. I honestly ask whether Claude Licari is going to [breach his bail conditions]. We have a situation where Licari's life has started to crumble. Let us save what is salvageable. The prejudice should not exceed by an inch what is necessary.” Kurt Sansone
15:17 The court asks what the amount allegedly embezzled is. The AG lawyer deflects, saying that it is not fixed at this stage. “They are now under arrest and so the fear of tampering and or absconding increases,” argues the AG lawyer. Kurt Sansone
15:16 The prosecution says there are civilian witnesses from Progress Press, where Rizzo works, Malta Enterprise and PWC who are important to the case. “It is useless to have just documents, it needs to be explained by people,” the prosecution insists. Kurt Sansone
15:15 The defence request bail. This is objected to by the prosecution. Kurt Sansone
15:15 The Attorney General’s office insists that the freezing order is necessary. Kurt Sansone
15:14 Montalto adds: “Show me what happened and then we'll talk. By don't come with a certain bravado and just throw it out there…” Kurt Sansone
15:14 Giglio repeats that he does not contest the need for the freezing order over the company, but insists “you cannot play with people's lives in this way”. He says: “The investigation turned up nothing but we're doing so anyway… Had there been any suspicion of wrongdoing an attachment order would have been issued but none had been. So, we cannot today, ‘add in his name because it may result’. This is not the way a prosecution is run and not the way to play with people's lives.” Kurt Sansone
15:09 The prosecution says that in order to protect the case, the court must preserve the assets which were possibly the fruit of illegalities. Kurt Sansone
15:09 Montalto insists: “We have a case where we are telling the court that these people had done nothing wrong in this context but we want to freeze their assets anyway.” Kurt Sansone
15:07 The lawyer says his client’s wealth has no shadow of doubt over any transactions. “Why is the prosecution making this request? Can I know? Why today, that we are arraigning Licari here as an employee, are we freezing his assets? Why are you creating unnecessary and unjust prejudice which will not allow me to contest these charges serenely?” Kurt Sansone
15:05 Montalto says that Licari's wealth is much less than that of the co-accused, but that the arguments were the same. “He started as a waiter at Jerma Palace and ended up as CFO at Allied,” Montalto says. Kurt Sansone
15:04 Giglio says the court has more evidence that the accused's assets are explained very acceptably and going back many years. “There is absolutely nothing wrong,” the lawyer says, adding that there should be no freezing order in Rizzo’s personal capacity. Kurt Sansone
15:02 She says that only €4,500 of Rizzo’s wealth were unaccounted for. He had €700,000 in liquid assets, the inspector says. “His financial profile did not raise any red flags,” she adds. Kurt Sansone
15:01 Bonello takes the stand and is administered the oath. Kurt Sansone
15:01 Xuereb replies that Rizzo was investigated in his personal capacity, but that Inspector Lianne Bonello would be best placed to answer about his financial probity. Kurt Sansone
15:00 Giglio: “We cannot come here and throw buzzwords from nowhere. It will not emerge that Rizzo received anything in his own name. This has already been told you by the inspectors and myself. At no point in the long hours we spent together did someone mention anything indicating Rizzo took anything in his own name. In fact, Rizzo's financial profile was impeccable.” Kurt Sansone
15:00 The prosecutor says that the men could have possibly assisted and the evidence may show that there were earnings. Therefore, the prosecution wants to protect these fraudulent earnings from being used. Kurt Sansone
14:59 Defence lawyer Joe Giglio says that there are difficulties when a person is charged in his personal capacity and as representative of a company. Vicarious liability had different elements, he explains. “Michel Rizzo was always investigated and interrogated as an official of the company,” says the lawyer, objecting to the freezing order over his personal funds. Kurt Sansone
14:58 “And in any other capacity?” asks the lawyer. “Neither,” the witness replies. Kurt Sansone
14:57 Montalto asks him whether the police established that none of the money mentioned in the charges – those coming from Malta Enterprise – had reached Licari. The inspector says that Licari had not received money in his personal capacity. Kurt Sansone
14:55 Inspector Joseph Xerri takes the stand next. Kurt Sansone
14:55 The lawyer was an employee not an official, suggests the lawyer. “He was the CFO, he wasn't a decision maker,” the lawyer suggests and the witness agrees. Kurt Sansone
14:54 The lawyer asks whether the police had any suspicion that Licari would try to approach any of the witnesses or accused in the other related cases. She replies in the negative. Kurt Sansone
14:53 Lawyer Roberto Montalto asks whether Claude Licari had cut off all ties with the company years ago. The inspector confirms. “I'm not going to give a date because I'm not sure but it was years ago,” she says. Kurt Sansone
14:52 One of the AG lawyers makes a remark under his breath - to the effect of ‘so far’ - and is snapped at by Giglio who demands to know if he knew different. The court says that it is only listening to him and the inspector. Kurt Sansone
14:51 Giglio moves on to police bail. Rizzo had always attended every appointment, the inspector confirms. He provided ample documentation, more than what was requested and there was no attempt to approach the witnesses. Kurt Sansone
14:49 Michel Rizzo was always acting in his own capacity as director, she confirms. Kurt Sansone
14:49 The inspector confirms. Kurt Sansone
14:48 Giglio asks whether the issue concerned the receipt of a grant by the company. Kurt Sansone
14:46 The FCID Inspector is asked whether there was an inquiry led my Magistrate Josette Demicoli, who had given the police instructions to investigate the directors of Progress Press and the persons arraigned today. She replies in the affirmative. Kurt Sansone
14:44 Giglio asks the court to summon Inspector Annemarie Xuereb to testify. Kurt Sansone
14:43 The prosecution asks the court to impose a freezing and seizure order. This is objected to by Montaldo. Giglio objects to the order but only in the name of Rizzo in his personal capacity. Kurt Sansone
14:41 Rizzo, 56, on behalf of Progress Press and in his personal capacity tells the court he is “definitely not guilty”. Licari, 41, also pleads not guilty. Kurt Sansone
14:40 Licari alone is also charged of failing to fulfil his duties as an accountant. Kurt Sansone
14:39 Rizzo is arraigned as director of Progress Press and Times of Malta. The court explains to the men what they are accused of: fraud, conspiracy to commit a crime punishable by imprisonment, false declaration to a public authority, forgery and money laundering. Kurt Sansone
14:35 Licari is represented by lawyer Roberto Montaldo, while Rizzo and Progress Press are being represented by lawyer Joe Giglio. Kurt Sansone
14:34 The prosecution informs the court that it will be amending the charges. Kurt Sansone
14:26 The accused are Allied Group managing director Michel Rizzo and former chief financial officer Claude Licari. Kurt Sansone
14:21 The magistrate emerges from chambers and we are now in session. Kurt Sansone
14:21 Police Inspector Anne Marie Xuereb and Inspector Joseph Xerri are prosecuting aided by three lawyers from the AG’s office. The defence lawyers are Joe Giglio and Roberto Montalto. Kurt Sansone
14:10 Our senior court reporter Matthew Agius is in court waiting for the proceedings to start. The two Allied Group officials are expected to be arraigned in front of duty magistrate Charmaine Galea. Kurt Sansone
14:09 Good afternoon. Kurt Sansone