Malta’s Ongoing Corruption Scandal Renews Focus on Money Laundering

The tragic murder of investigative journalist Daphne Caruana Galizia in 2017 sparked international outrage—and the fear that nothing would be done to discover who was behind her death.  This turns out not to be the case.  After years of persistence from her family and journalist community, Yorgen Fenech, a gambling, real estate, and energy mogul, was arrested on November 20 for complicity in her murder.  He has pleaded not guilty.

This arrest may have just been the beginning.  Since then, public outrage caused the Prime Minister, Joseph Muscat, to announce he would step down in January 2020.  Mr. Muscat’s close advisors, including his chief of staff Keith Schembri, Economy Minister Chris Cardona, and Tourism Minister Konrad Mizzi. have also resigned.  For years now, Mr. Muscat’s administration has been accused of corruption, often by Ms. Caruana Galizia herself.  Now, her death may finally cause his ouster.

Ms. Caruana Galizia made a career out of singlehandedly exposing the corruption, money laundering, and illicit activities of Malta’s powerful.  The small island is host to a significant number of online sports betting companies, many of which are owned by the Italian mafia.  It is has notoriously lax banking laws and a pay-to-play citizenship system favored by the rich looking to gain entry to the European Union.

One of Ms. Caruana Galizia’s final investigations was into the true ownership behind a Dubai-based shell company, 17 Black Limited.  Friends and fellow journalists finished her investigation a year later, publishing evidence that Mr. Fenech was behind the company, which was used to pay millions of dollars to the government officials Mr. Mizzi and Mr. Schembri (through their own shell companies).  Mr. Fenech’s company, Electrogas, then won a lucrative energy contract, worth approximately $5 billion.

This scandal continues to plunge Malta into chaos, as new revelations regarding corruption in the Caruana Galizia murder investigation itself come out.  Whether this will ultimately reinvigorate calls for fundamental corruption reforms in Malta remains to be seen.

Constantine Cannon whistleblower attorneys have published on money laundering and have expertise on exposing related schemes.  If you have any information about money laundering or corruption in Malta or elsewhere, please contact us.

READ MORE:

• Constantine Cannon Attorneys Eric Havian and Michael Ronickher Published on Need for Whistleblowers in Anti-Money Laundering Enforcement
• Corruption in Malta
• Legal Sports Betting Is Leading to Serious Fraud Risks
• Panama Papers Journalist Murdered in Malta
• Question of the Week — Can Authorities Stop the Mob from Laundering Money Through Online Gambling Sites?
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