Court hears details of €20 million Libyan money-moving operation using hawala money transfer

Four Libyan men accused of tax evasion and laundering over €20 million had been coming and going from Malta with large amounts of cash linked with the purchases of luxury cars, expensive jewellery and designer clothes, mostly from Turkey, for years a court has heard.

The men had travelled between the two countries since 2010, but the operation had started to grow in size and scope from 2019 onwards, with €18,532, 035 being declared by the Libyans, the majority of which involved food imports. The money was moved using the hawala money transfer system, which is an informal method of transferring money without any physical money actually moving, used in the Arab world. It is sometimes described as a "money transfer without money movement."  

The accused, Hesham Zayed, Essam Mohamed Edernawi and their companies P.H.F. Ltd, U.G.T. Company Ltd, Express Route Company Ltd, HZ Medical Equipment and Health Services Company Ltd and H&H Investments Ltd had been arrested in a police operation involving the Anti Money Laundering Squad, which had confiscated two luxury cars worth around €100,000 each, as well as cash. Also charged in connection with the operation were Khaled Baely and Hdidan Tamer Ramadan Ali. 

Foreign vehicle number plates were also seized, together with electronic equipment which is being analysed.

Police inspector Keith Mullen testified before magistrate Gabriella Vella that the squad had received intelligence in May 2020 relating to several Maltese citizens of Arab origin who had allegedly been declaring substantial amounts of cash at Malta International Airport customs.

Between €100,000 and €200,000 would be declared at a time, Mullen told the court. Initial investigations indicated that the persons they had been tipped off about were not members of the same group, he said, explaining that the investigation took a two-pronged approach – one into persons declaring cash in the name of Hesham Zayed and another into companies in which Zayed was specifically involved, mentioning U.G.T., Wedo Oil & Gas Services Ltd and Drinkeat International Company Ltd.

Zayed had first declared cash in 2012, with more declarations being made in the two years that followed. There were no declarations made in his name between 2014 and 2017, after which thousands – and on one occasion, over a million euros – were declared.

Tamer had declared €27,600 on his arrival from Libya in 2017, ostensibly to buy a car, said the inspector, adding that on his part, Baeley had been arrested in Spain with €250,430 in undeclared cash in 2018. Zayed had apparently started to reduce the amounts of cash he was transporting and this led to Baeley and Ramadan Ali Hdidan entering the scene.

The inspector testified that other persons were also apparently involved in the money laundering operation – a certain Omar Azumi from Malta, residing in Manchester, as well as Murad Ali Al Forgani and Elhadi Mohammed El Wohashi. These individuals had declared a total of €18,532,035 to customs, claiming the money was for the purchase of basmati rice, chicken legs and baby milk.

Zayed had approached the police himself to give an explanation, claiming that the money was his and was supposed to be transported to the UK as initial capital for a company he had opened there with Azumi, called FX ad Payments Ltd.

The inspector added that Zayed had told him of the difficulties encountered by Libyans when moving money around in the normal banking system.

He explained that by 17 February, around €20,700,000 in cash had been declared with Maltese Customs, the majority of which were being taken from Malta to Istanbul.

Lawyers Franco Debono, Arthur Azzopardi, Mario Buttigieg, Mario Mifsud and Christian Camilleri are appearing for the accused.