CapitalOne | ‘Serious shortcoming’ by police not to pursue money laundering case • Not excluded investigation stopped when Fenech Adami’s name cropped up

The board of inquiry tasked with investigating the way Maltese police handled the CapitalOne money laundering case, has declared it cannot exclude the possibility that the criminal investigation failed to gather steam when the name of Nationalist MP Beppe Fenech Adami cropped up in January 2013.

But it made a clear declaration that the CapitalOne investigation – for reasons unknown – was shorn of any guidance from police superiors when it merited a proper investigation by anti-money laundering inspectors.

“There was a serious shortcoming from police not to persist in the investigation,” said the board of three retired judges who said the facts of MaltaToday’s story had been in the main substantiated.

Read the report of the board of inquiry here

Explainer | The CapitalOne investigation and Beppe Fenech Adami

It is hard to understand why the investigation was not pursued. The board met the usual excuses of ‘passing the buck’ from one official to the other… Nobody mentioned the fact that a PEP’s name, Beppe Fenech Adami’s, had cropped up in the investigation… his name turned the investigation into a hot potato that could have brought unpleasant consequences on whoever dared to handle it

When it came to the fact that police investigators had flagged Fenech Adami’s name as the directory of Baltimore Fiduciary, which owned CapitalOne as nominee, the judges said: “It cannot be said for certain that the investigation did not continue when the PEP’s name was revealed... equally, it cannot be excluded that this happened.”

At the time, Fenech Adami was a parliamentary assistant for home affairs, and the country had just entered a general election. The MP has always denied having any knowledge of the investigation at the time.

The board of inquiry presided by Judge Joseph D. Camilleri, launched after MaltaToday published its story in October 2016, found that information on banking transactions related to CapitalOne – obtained following a freezing request by Dutch investigators into an Amsterdam drugs bust – had not been passed on to the Dutch prosecutor only because they had not been specifically requested.

“This board believes the police was duty-bound to investigate CapitalOne on the serious suspicions of money laundering… the investigation that was started by anti-money laundering unit inspector Raymond Aquilina found itself in difficulty, stopped, then was practically forgotten.

“This investigation, borne indirectly out of a freezing request, merited its own formal file, and had to be given the right direction from Aquilina’s superiors, so that it could be carried out like other normal investigations.”

The board said that MaltaToday’s assertion that CapitalOne’s over €5 million in banking transactions should have been passed on to Dutch prosecutors, had no basis, and that the Attorney General had even denied receiving this evidence.

But after analysing the transactions that passed through CapitalOne’s bank accounts – in a separate technical report that was not published – the board said that there was a “serious shortcoming” by the police not to persist in the investigation.

Baltimore Fiduciary was owned by Richard Abdilla Castillo (left) while Fenech Adami (right) resigned as non-executive director in January 2014

“In the board’s opinion, this investigation did not continue because there was a lack of strong and necessary will on the part of the police to allow the investigation to take its normal course…

“Indirectly the investigation started from what appeared as an innocuous request to the police for a freezing order, and it is hard to understand why the investigation was not pursued. The board met the usual excuses of ‘passing the buck’ from one official to the other, or to the bank which has a designated person to report suspicious transactions to the FIAU.”

It said that other police witnesses appeared satisfied that the Dutch did not pursue any more criminal action against suspects Robert Soogea and Henrique Cumberbatch after April 2013, when drug-related charges were dropped over lack of evidence.

“They argued that no money laundering investigation could take place without a court of law finding guilty on such a crime. Others said the Attorney General should have requested the Dutch whether it could start ‘another investigation in my country’.

“Nobody mentioned the fact that a PEP’s name, Beppe Fenech Adami’s, had cropped up in the investigation… his name turned the investigation into a hot potato that could have brought unpleasant consequences on whoever dared to handle it in January 2013. The saying goes that one does not bite the hand that feeds him, but a person of integrity does not abide by this maxim. The responsibility of the role must be carried out even in the burdensome circumstances when personal interests might suggest otherwise.”