Magistrate abstains from hearing money laundering case

A magistrate has abstained from hearing a money laundering case against two Libyan men and a number of Maltese companies, after noting that she had also presided over the magisterial inquiry into the case, which inquiry had not been closed by the Attorney General.

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 began this morning before magistrate Donatella Frendo Dimech. The accused are denying the charges.

The accused were arraigned on Saturday, charged with a number of offences related to 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 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.

But when the case was called before magistrate Donatella Frendo Dimech this morning, lawyers Arthur Azzopardi and Franco Debono, appearing for Zayed and the companies, together with lawyer Etienne Calleja, who appeared on behalf of Edernawi, asked the magistrate to abstain as she was involved in the still-open inquiry into the case.

The magistrate, after consulting with the case file, observed that Azzopardi was right in his submissions. Her initial reaction was that she would not abstain so as not to add to her colleagues’ workload, and to order the AG to close the inquiry immediately, she said.

However, Debono argued that it was “bad enough” that the magistrates who carry out inquiries also decide cases, but that in this case, there was also the issue that the magistrate who carried out this particular inquiry was also deciding this particular case.

This would cause problems down the line when the court decrees on prima facie with a pending inquiry still open, the lawyers said.

The defence presented a note to this effect.

“I have a blind faith in this court, total and absolute; the problem is the system,” said Debono sympathetically.

Prosecutor Antoine Agius Bonnici, appearing for the Office of the Attorney General, argued that recusal was not necessary and that the court could, instead, order the inquiry to close immediately.

The magistrate however did not agree with the prosecution, observing that while she had not expressed judgment during the inquiry, the fact remained that it was still pending.

“It stands to reason that I cannot hear the case as it is. I will postpone the case for a decree to be given later today.” “What’s right is right,” said the magistrate.

When the sitting was reconvened at 11:15am, the magistrate dictated a note, stating that she was the inquiring magistrate in the relevant inquiry, which was still open, and that the defence had made submissions in writing to this effect. The court said that it had also seen the AG’s reply, in which he informed the court that the inquiry needed to remain open for procedural reasons.

After retiring for a further 15 minutes to deliberate, the magistrate emerged from chambers to issue a decree on the recusal request. “Although it had not expressed itself on the inquiry outcome, the inquiry is still ongoing, and the court as presided cannot exclude that it would give a decision in future, during the inquiry that would give rise to the necessity of its recusal.”

The magistrate upheld the request for her recusal, ordering the registrar of courts to assign the cases to a different magistrate.