Oil scandal: trader’s wife silent when told she issued illicit invoices

The wife of pardoned oil trader George Farrugia has exercised her right to silence after it was suggested in court that she had been issuing illicit invoices without the knowledge of company directors. 

Catherine Farrugia took the witness stand before Magistrate Yana Micallef Stafrace on Tuesday as the compilation of evidence against brothers Antonio Farrugia, Gaetano Farrugia, Raymond Farrugia, Emmanuel Farrugia, and Salvatore Farrugia continued.  

The Farrugia brothers are principals of the John’s Group, who are denying charges relating to the bribery of state officials. 

Their brother George Farrugia was granted a presidential pardon in 2013 when MaltaToday had revealed his role in a network of bribery that included former Enemalta chairman Tancred Tabone, the businessmen Anthony Cassar and Francis Portelli. Farrugia was then heading the John’s Group company Powerplan, an importer of lubricants. 

Before exercising her right to silence, Farrugia told the court that she did not know the identity of the ultimate beneficial owner of Aikon, a company with a Swiss bank account allegedly used by George Farrugia as a personal slush fund that siphoned off Powerplan profits. 

MaltaToday had revealed that Aikon had been set up in 2002 and operated until 2010 without the Farrugia brothers’ knowledge. 

Replying to questions put to her on the stand this morning by lawyer David Farrugia Sacco, Catherine Farrugia said she was not officially employed by her husband but would perform some tasks on a voluntary basis. The witness told the court that she had decided to go to work with her husband because George Farrugia’s frequent absences were taking a toll on her marriage at the time. 

She described Powerplan as a company “in the lubricants, petrol stations and oil business.” 

Farrugia said she did not know of Powerplan’s agreements with Total and other foreign companies and had never interacted with them. “I know the lubricants would have Total written on the cans,” she said, when pressed on this by the lawyer. 

“To type out an invoice I would have instructions, either from my husband or someone else,” she said, referring to local clients such as mechanics and service stations. She said she “might have had to make some invoices for George,” and recalled the oil exporting company Totsa.  “One fine day, accountant John Farrugia came up to me and told me that the accountant was leaving the company and that I would have to do them [the invoices].” 

‘I don’t know who incorporated Aikon’ 

Catherine Farrugia recognised a Trafigura invoice shown to her, as having been issued by Aikon. “It was a company like the others. Worked in the oil business,” she said. 

She said she was of the understanding that Aikon was a part of the John’s group of companies but claimed not to know who had incorporated Aikon. “Today, I know my husband was involved in it, but I don’t know anyone else.” 

She insisted that she didn’t know who the beneficial owner of Aikon was. “Definitely not me… they don’t tell me anything. My husband doesn’t involve me in business. It was the first thing we agreed on after getting married – that we don’t talk about work.” 

Farrugia was then shown an email exchange on invoices sent and received, in which her email address was one of the recipients. “George used to tell me to issue an invoice on X, or Y. What’s the problem?” asked the witness. 

“Did you ask [your husband] whether the same arrangement applied to Aikon?” probed the lawyer. “No. I am not interested,” the witness replied. “Aikon was another company to me.”  

She insisted that she had not seen any documents stating that Aikon belonged to George Farrugia. 

The subject of the questions turned to George Farrugia’s dealings in Switzerland. Farrugia said her husband would only inform her of his frequent visits abroad on the eve. 

She said her husband would travel to Switzerland to meet suppliers but added that he had never mentioned any banks. “He never told me [about any Swiss bank accounts] but if you look at the invoice you’ll see [that the bank details are of a Swiss account],” added the witness. “Totsa’s head office was in Switzerland. How was I supposed to know whether any banking took place?” 

Farrugia Sacco’s line of questioning then turned back to when Catherine Farrugia had first heard about Aikon. “So when you found out in 2010, what did your husband tell you?” he asked. 

At this point, lawyer Arthur Azzopardi, assisting the witness, objected to the lawyer’s question on the grounds that the information being requested was privileged. “He is trying to get around the presidential pardon. He is trying to undermine her husband’s pardon…” 

Farrugia Sacco denied that this was the intention, saying that he was “simply trying to arrive at the point that the witness herself had been writing these invoices and not the defendants.” 

Azzopardi pointed out that in that case, she was entitled to the right to remain silent to avoid incriminating herself.  

The magistrate agreed and cautioned the witness, who then opted not to testify further to avoid exposing herself to the risk of criminal proceedings against her. 

Replying to Farrugia Sacco’s final question, about whether she had ever discussed Aikon with the defendants, Catherine Farrugia replied that she had not.  

The case was adjourned to September. 

In other court proceedings over the years, it had emerged that her husband, George Farrugia, was Aikon’s sole beneficial owner. It was back in 2013 that MaltaToday had revealed that the oil trader had set up Aikon’s bank account at the Edmond de Rothschild bank in Geneva in 2004. Farrugia’s brothers had taken him to court in 2010 for having funnelled cash from Power Plan into Aikon’s Swiss bank account, to their detriment. 

George Farrugia had then claimed that his brothers had been aware that Aikon was being used as a slush fund for officials such as then Enemalta chairman Tancred Tabone.