Hawala money laundering: magistrate rules there is 'a case to answer'

Magistrate Gabriella Vella decrees there is sufficient evidence to indict two Libyan men and five companies, accused of using hawala money transfer system to launder money

(File Photo)
(File Photo)

A magistrate has decreed that there is sufficient evidence to indict two Libyan men and five companies, accused of using the hawala money transfer system to launder money, noting they had declared zero income to the authorities, whilst depositing hundreds of thousands in their respective bank accounts and registered 25 luxury vehicles in their names.

The criminal case against 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 continued this morning before magistrate Gabriella Vella.

In a decree handed down this morning, Magistrate Vella declared there was sufficient prima facie evidence for an indictment, ruling that the testimony given by Police Inspector Keith Mallan, who investigated this case, had already been partially corroborated by other witnesses and that a picture was emerging, showing connections linking Zayed, Edernawi and the companies to a criminal operation which laundered millions of euros in cash.

“From the testimony of Inspector Mallan, taken in its entirety and in the proper manner, in fact it appears that there is a case to answer and the evidence exhibited so far by the Prosecution deserve further investigation.”

The magistrate disagreed with the defence’s argument that the predicate offence – the crime which necessitated the funds’ laundering – had not been identified. She pointed out that the Prevention of Money Laundering Act expressly stated that for the finding of guilt under that Act, there was no need for the prosecution to prove that the person accused had been convicted of the predicate offence, and without the need to “establish with precision what the predicate offence is.”

In its decree, the court examined bank transactions relating to accounts operated by the accused men and companies, noting deposits and transfers of millions of euros between Hesham Zayed’s companies and Zayed himself, as well as transactions with other companies connected to the British Virgin Islands and Gibraltar.

In May 2020, the police’s Anti Money Laundering squad had received intelligence indicating Zayed as the leader of an organisation which had been sending millions of Euros in cash from Malta to Istanbul, over the span of several years, using couriers.

The court noted that despite the many transactions, Zayed had never been registered as employed in Malta, but had been involved, together with his wife, Caroline Gatt, in around 40 contracts for the sale or purchase of property through the company H&H Investments Ltd.

From 2015 to date, Zayed had registered 21 vehicles in his name, noted the court. His wife, although registered as unemployed, had registered two top-of-the-range Mercedes C-class cars, an Audi Q7 and a Mini Cooper in hers.

Between 2016 and 2018, Zayed had declared zero income to the taxman, despite having €580,000 deposited in his accounts during that period.
The accused had been arraigned earlier this month, on charges relating to money laundering and criminal activity. Essam and Edernawi alone are also accused of carrying out banking activity without a licence and conspiracy. Zayed alone is further charged with handling goods obtained through theft or fraud and evading taxes.

The accused are denying the charges. The arraignments came after the arrest of seven suspects of Libyan and Maltese origin on 29 November, over suspected involvement in a money-laundering scheme that utilised five Maltese companies.

The funds were for the most part sent to Turkey using both cash couriers and the informal hawala money transfer system. Prosecutors believe the origin of the funds involves tax evasion and other criminal offences.

The case continues in January.

Lawyers Franco Debono, Mario Mifsud, Etienne Calleja and Jacob Magri represented the defendants in today’s sitting. 

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