Money laundering investigation was not pursued when Beppe Fenech Adami’s name cropped up

A police investigation in January 2013 that raised the spectre of money laundering was never pursued by the Maltese police, ostensibly when the name of Nationalist MP Beppe Fenech Adami cropped up as one of the directors of a fiduciary services company that handled the affairs of CapitalOne Investment Group.

Acting on a Dutch request for assistance, Maltese police were looking into the banking transactions of CapitalOne, a company connected to Robert Soogea, a Dutchman whose property was raided by police in a drug bust.

In an investigation carried out jointly by MaltaToday and freelance journalist Mark Hollingsworth, sources privy to the Dutch investigation have expressed frustration that not all evidence connected to banking transactions by Capitalone were passed on to them by the Maltese police.

Both Beppe Fenech Adami and Robert Abdilla Castillo – directors of Baltimore Fiduciary, which acted as the nominee company that ‘owned’ CapitalOne’s shares – have denied knowing anything of this investigation, even though an asset freeze was ordered on request of the Dutch police.

At the time, Beppe Fenech Adami was parliamentary assistant for home affairs, handling the portfolio for then prime minister Lawrence Gonzi. He has denied having been spoken to about this case by police at the time.

MaltaToday understands that the asset freeze carried out by the Maltese police for the Dutch, would have required a court order.

But the court order does not appear on the public registry of the Financial Intelligence Analysis Unit.

Maltese police found that Bank of Valletta had issued Visa gold credit cards in the name of suspect Robert Soogea and his associates, and that CapitalOne was used to receieve millions in cash, some of which was deposited in a Valletta Fund Management account, and then dispensed to pay off Soogea’s expenses and to acquire share capital in various Greek companies - almost all of these companies are dissolved today.

When investigators pieced together a report for police top brass on 13 January, the Capitalone file was marked ‘BU – 3 months’ – bring up in three months – on 31 January. By April 2013, the Dutch had dropped their charges due to lack of evidence, and in December 2013, the Capitalone file was marked ‘PU’ – ‘put away’.

CapitalOne: the side-lined investigation?

It was on 13 January, 2013, when a police inspector’s report into a case of alleged money laundering landed in the lap of assistant commissioner Michael Cassar.

Malta was then in the throes of a heated general election campaign where the incumbent Nationalist government was facing negative poll ratings. Lawrence Gonzi’s government had been forced to call elections after his tenuous one-seat majority lost a budgetary vote in the preceding December.

What Michael Cassar now read in a report from inspector Raymond Aquilina, who had been tasked with handling an asset-freezing request from Dutch investigators, seemed to spell trouble.

“Having conducted what has been requested by the Dutch authorities… enquiries in the fiduciary company ‘Baltimore’ and its directors [of] whom one is a PEP” – politically exposed person – “papers are being referred… for onward reference to Europol office through ACSB [assistant commissioner special branch] and as deemed necessary, please.”

That PEP, it turned out, was Beppe Fenech Adami, the then parliamentary assistant for home affairs, handling the home affairs portfolio for Prime Minister Lawrence Gonzi, as well as being the son of the erstwhile President and former prime minister Eddie Fenech Adami. He was listed as a director of a fiduciary services company – Baltimore Fiduciary Services – that acted as the nominee shareholder for a suspicious entity called CapitalOne Investment Group.

CapitalOne’s ultimate beneficiary owner – Dutch police said – was a Dutch poker player called Robert Soogea, whom Amsterdam police had arrested and questioned in a drug bust weeks before.

But in an investigation carried out by MaltaToday and freelance journalist Mark Hollingsworth, sources privy to both sides of the investigation have said that a whole body of evidence – chiefly banking transactions that showed suspicious movements of large amounts – were never passed on to Dutch investigators.

These large deposits and payouts to other companies, sometimes hundreds of thousands of euros passing daily into a Bank of Valletta and Valletta Fund Management account, were carried out by Baltimore Fiduciary’s owner and director Richard Abdilla Castillo, ostensibly on instructions of CapitalOne’s Dutch owners.

A fiduciary services company ‘moving’ money for someone who had been arrested by Dutch prosecutors in connection with drug trafficking allegations should have rung alarm bells. Instead, neither police nor the office of the Maltese Attorney General seemed eager to take this police investigation forward: certainly, not during the 2013 elections.

Beppe Fenech Adami’s position as parliamentary assistant responsible for home affairs, was one of the positions that had been created by Lawrence Gonzi a year earlier for his disgruntled MPs. Fenech Adami had been seconded to Carm Mifsud Bonnici’s home affairs ministry back in January 2012, but by the time the minister had resigned in a confidence vote, Fenech Adami was tasked with ‘running the show’ for Gonzi, who had absorbed the home affairs ministry. Fenech Adami was a de facto ‘minister for police’. But he has denied categorically to MaltaToday ever knowing of the CapitalOne investigation.

On 20 January, the political landscape was also hit by MaltaToday’s revelations on the Enemalta oil scandal, instantly kick-starting a police investigation into allegations of bribery for the procurement of fuel. As the Gonzi administration, the Attorney General and the Commissioner of Police agonised over issuing a presidential pardon for rogue oil trader George Farrugia to turn State’s evidence, a decision also had to be taken whether the suspect transactions inside CapitalOne Investment Group should be investigated.

And it was only weeks since the Dalligate investigation had kicked off into a multi-million bribe solicited by a man allegedly on behalf of John Dalli, the former EU commissioner.

But the CapitalOne evidence was sufficient enough to be forwarded to Europol, as the police inspector signing off the report told his superiors: these were big money movements being carried out for a company connected to men suspected of drug trafficking, by a nominee company whose job was to hide the identity of an ultimate beneficial owner. 

On 31 January, police top brass took a final look at the CapitalOne/Baltimore file and wrote “BU in 3 months” – bring up in three months. That investigation would have to be dealt with by the powers that be once the March general election was over, it seemed.

But that investigation would stop dead in its tracks. The Dutch, as angry prosecutors later found out, never received the banking documents that showed the trail of suspicious transactions carried out for CapitalOne Investment. When their case fell in April 2013, ostensibly due to lack of evidence, the Maltese did not pursue the money laundering investigations. And in December 2013, the police put the case aside, as it were, with a final note marking the file as “PU” – put away.

On 17 January, 2014, Beppe Fenech Adami – now the PN’s deputy leader for party affairs – resigned as director of Baltimore Fiduciary Services.

Dutch drug bust and freezing request 

On 21 November, 2012, a request for mutual cooperation came through to the Maltese police from the Amsterdam public prosecutor after evidence had been found in several properties about a network of companies, one of which was CapitalOne Investment, involved in a suspected trafficking network.

In the course of a criminal investigation, police had raided an Amsterdam residence, where suspect Henrique Regilio Cumberbatch, originally of Suriname, had been staying. A quantity of soft drugs, amounting to not more than 100g, was found here.

The prime suspect for the Dutch police however, was another individual, a high-roller poker player called Robert Soogea, 48. In the search of this first residence, police found a hidden space behind a plinth next to the ceiling in the bedroom. In a hidden drawer, police found correspondence and consignment notes related to goods that had been shipped from Brazil to Rotterdam. This is what police were after.

When he learned of Cumberbatch’s arrest, Soogea – who had not yet been arrested – was taped in a phone conversation calling a woman who was staying at the residence at the time of the search. From the tapped conversation, Soogea was heard giving the woman instructions to remove the papers from the drawer next to the ceiling. But the woman said the papers had been removed. Clearly Soogea was well aware of the importance of these consignment notes and papers: among them was a Bank of Valletta Visa gold card issued in the name of ‘CapitalOne Inv.Group / Robert Guillaume SOOGEA’.

Soogea was arrested a few hours later. In a raid on a second property, some 1,000g of soft drugs and 80g of hard drugs were found, together with the sum of €62,500. Another €35,000 was found in a third residence that police raided, where Soogea had been residing. A fourth residence was raided where more papers were found behind a drawer under the waterbed in the bedroom.

The sum total of these papers was important for police. Apart from the shipping consignment notes and the bank card, Soogea was the ultimate beneficiary owner of several Cypriot businesses. One of them was Senoblema Trading, which had acquired a total of 250,000 shares in the Malta company CapitalOne Investment Group. Senoblema had loaned another Cypriot company, Gillesa Trading, €3.8 million to be repaid between 2012 and 2015. Soogea was also the beneficial owner of Gillesa Shipping, a company which deposited large amounts of cash into CapitalOne’s BOV account.

During his interview with police, Soogea stated that he had no possessions or income, and that he had no interests in companies or businesses. But this was a lie, as Maltese police would later find from evidence gathered from inside Bank of Valletta.

The Dutch police requested a freezing order of Soogea’s assets in Malta in November 2012: “He is involved with residences where drugs were found and is aware of consignment notes kept in a hidden space [related] to containers with goods shipped from Brazil to Rotterdam… There are serious suspicions that suspect Soogea tried to his criminal assets by means of various companies and is possibly involved in international drugs transportations.”

Police investigation

Assistant Commissioner Michael Cassar was informed of the Dutch request for a freezing order on 22 November, and was told that Soogea would soon be able to communicate with people outside the penitentiary where he was being held. “From that moment, there is a risk of dissipation of the assets,” the Dutch warned.

On 18 December, inspector Mario Cuschieri communicated the request to deputy Attorney General – today magistrate – Donatella Frendo Dimech, and the order was duly signed by Attorney General Peter Grech.

In their request to BOV, the police demanded all information related to Soogea, warning that the man was suspected of trafficking in narcotics. 

Before the year was out, BOV informed the police that three credit cards had been issued in the names of suspects Soogea and Cumberbatch, and a Greek associate, Ioannis Moustos.

Within less than eight months of its founding, CapitalOne Investment had also filed notice with the MFSA in February 2009 that it was raising its authorised share capital from €50,000 to €200 million – a sign of larger investments coming its way.

Bank transactions showed regular deposits into a euro savings accounts that went as high as €1 million, before being transferred into a Valletta Fund Management account.

For example, almost €1 million was deposited over three weeks from a Greek firm called Logistics SA.

Then money from the bank account would be used to acquire the shareholding of Greek tourism company GATS, and thereafter more lump sums of €250,000 were regularly paid out to increase the share capital of this and related companies. All these bank movements predated the absorption of all these companies into a loss-making Cypriot firm Avacom, which acquired the shares of the companies owned by Soogea and Cumberbatch.

At one point, a €1 million payment was effected by a fur coats merchant in Siena, Italy, called Agar Srl. The next day €1.2 million was deposited inside a Valletta Fund Management account.

Even more cash was paid to CapitalOne Investment from companies like Gillesa Shipping, which the Dutch say was Soogea’s own company.

The money held in Malta, managed by Baltimore Fiduciary, was mainly used to acquire and accumulate shares in all these companies and properties in other countries.

Regular payments were made to settle Visa gold fees that Soogea accumulated in the places he visited: Sao Paolo, Las Vegas, Nicosia, the Isle of Man, Rotterdam.

To Maltese police poring over the transactions, this was at the very least a suspicious trail of money movement – at best, classic money laundering. Although listed as a director of Baltimore, there appears no smoking gun of irregularity for Beppe Fenech Adami: all these trading instruments were signed by Richard Abdilla Castillo and company secretary Joe Zammit Pavia.

But for the Maltese investigators who collated the banking transactions, this was evidence that had to be transmitted to Europol at The Hague.

‘Bring up in three months’

In a 3 January email to Dutch prosecutors, deputy attorney general Donatella Frendo Dimech communicated details of the BOV credit cards and the existence of the bank account. Police investigators at this point had already collected the evidence together of the bank transactions for CapitalOne.

But sources privy to the Dutch investigation insist they did not see the full body of evidence. “Although the Maltese assisted us with the asset freeze, as they were obliged to do under EU law, they did not do so over the results of their investigation into CapitalOne, Baltimore Fiduciary, Fenech Adami, bank transfers…

“This was one of our specific requests to the Maltese in its initial request.”

On 23 January, the Dutch prosecutor asked Frendo Dimech whether it “would be possible to provide information concerning the question whether it is worth the effort to send you an EU freezing order with regard to the other accounts?”

MaltaToday is unable to establish whether this request was given a reply. At this time, it appears the police were already aware that Beppe Fenech Adami had been identified as a director of Baltimore Fiduciary.

“This was one of our specific requests to the Maltese,” the Dutch source insists. “This lack of cooperation is what we believe killed our investigation. If they had passed us this information, we would have in all likelihood devoted more resources to it and bumped it up in importance. At the time we had been unaware that the Maltese had found anything and so did not pursue.”

On 16 April, the Maltese were told that the Dutch prosecutor had dropped its charges against Soogea and Cumberbatch due to lack of evidence. “There is a small chance that an investigation will be started by the national public prosecutor at a later moment,” they mused.

Two days later the freezing order was revoked. But this freezing order does not appear anywhere in the public register uploaded on the website of the Financial Intelligence Analysis Unit, which displays all freezing orders sworn before the Maltese courts.

This, a top legal source assured MaltaToday, was mandatory according to law: the asset freeze had to be sworn before a judge as laid down in the Prevention of Money Laundering Act.

The police file into CapitalOne Investment Group was once again referred to the special branch, for transmission to Europol.

By 27 December 2013, the suspended investigation was destined to be totally forgotten when the file was marked “PU” – put away. At this stage, Michael Cassar was no longer part of the police force but heading the Malta Security Service, appointed there since April. Today Cassar is a consultant to the MSS.

Beppe Fenech Adami, who a year earlier had declared his directorship in Baltimore Fiduciary in his parliamentary declaration of assets, filed a notice of his resignation in January 2014.

Even Richard Abdilla Castillo ensured that Baltimore Fiduciary no longer managed as nominee owner, CapitalOne, in 2016 selling all its 5,000 shares to Ioannis Moustos – the Greek associate in whose name BOV had also issued a credit card.

The Greek companies that the Dutch said Robert Soogea was an owner of – Gillesa Shipping and Senoblema Trading – are all dissolved today and no longer trading. Together with Cumberbatch’s company Chriphera Enterprises, Senoblema’s shares were acquired by Avacom.

And Robert Soogea can be seen smiling: earlier this year he took the top €150,000 prize at the 2016 World Poker Tour in Amsterdam.

COMMENTS: Richard Abdilla Castillo

“This is news to me”, the owner of Baltimore Fiduciary Services told MaltaToday, insisting that he was not aware of any investigation or asset freeze. “I was never informed by police. I wasn’t 100% involved in it... I did sign its affairs but the details you ask me of happened some time ago.”

Abdilla Castillo said he had no idea that the company’s UBO had been arrested in a drugs raid.

“We have removed the company,” he said of the recent sale of CapitalOne to Ioannis Moustos. “As a fiduciary we haven’t traded for some time now and some workers had left. We were running down other companies.

“I wasn’t hands-on. I’m a director... but there were other people taking care of it.

“I never received any notification from the police or the bank [of the asset freeze].”

Abdilla Castillo also said that although Fenech Adami was a director he was not involved in the company.

COMMENTS: Beppe Fenech Adami

In comments to MaltaToday, MP Beppe Fenech Adami said he remembers nothing of a police investigation dealing with either Baltimore Fiduciary or CapitalOne Investment Group. “I have no idea what you’re talking about. Nobody spoke to me about it.”

He said he was “not aware about CapitalOne and any investigation” when asked about the asset freeze on the company’s bank accounts, and that nobody had spoken to him about the investigation.

He also said Richard Abdilla Castillo, the owner of Baltimore and co-director, had not spoken to him about any asset freeze. “This is totally news to me.”

He also denied having been spoken to by police about the investigation when he was parliamentary assistant for home affairs. “No, no, absolutely not. This is the first time I am hearing about it. I resigned in January 2014 because there was no reason to remain on. I’m not the person who used to take care of the daily running of the company.”

COMMENTS: Michael Cassar

Former Assistant Commissioner (later Police Commissioner) Michael Cassar ssaid he could not answer for any investigation, and said that he could not remember details of any investigation.

“I was going from one investigation to the other. I would see hundreds of files in 2013.”

When told that he was informed of the existence of a PEP in Baltimore Fiduciary and that this was Beppe Fenech Adami, Cassar said he could not remember. “I can only refer you to the file in question, it’s only the right solution, because I cannot speak from memory.

“I will not tell you whether I remember Fenech Adami’s name or not. Ask the Commissioner and he will answer you on the facts.”

‘BRING UP in three months’

Cassar insisted that ‘bring up’ does not mean the investigation was postponed. “It means someone is still waiting for something, maybe a reply from the AG, or because something is missing from the investigation.”

Cassar could not say why he felt the investigation should be ‘brought up in three months’ and refuted suggestions it was because of the elections.

“I have told you everything I know. Ask the Commissioner.”