Tax havens hampered efforts at finding Shaukat Ali's Vitals gains, experts tell court

Forensic accounting experts who had assisted the magisterial inquiry into the fraudulent concession of three public hospitals to Vitals Global Healthcare have explained why a precise figure for the money Shaukat Ali Chaudry made through the deal could not be established from the available data.

Miroslava Milenovic, a forensic accountant and former Special Prosecutor for Organised Crime in Serbia, testified via video link to the Criminal Court on Friday before madame justice Edwina Grima, in a legal challenge filed by Shaukat Ali Chaudry and his wife Aasia Parveen Shaukat to the €30 million and €20 million freezing orders currently in force over their assets.

The couple deny charges of money laundering, trading in influence, misappropriation, promotion and active participation in a criminal organisation and corruption, in relation to the subsequently rescinded hospitals deal, which has cost the Maltese taxpayer at least €355 million.

Lawyer Shazoo Ghaznavi, assisting the couple together with lawyer Jessica Formosa, asked Milenovic about Global Asset Holdings Limited (GAH). “I’m not interested in Bluestone or Accutor, they aren’t my clients,” said the lawyer. “Neither am I interested in whether they carried out a crime - that is not the issue today. Today my issue is whether you managed to establish the global amount obtained by Global Asset Holdings Ltd from the concession funds and whether you managed to classify these funds as being potential proceeds of wrongdoing or proceeds for services rendered.”

Milenovic pointed to the payments of €25,000 to GAH from Bluestone Investments Ltd, every month for three years, ostensibly as part of a procurement consultancy agreement.  The inquiry report states that GAH “does not appear to have performed any duties associated with that of a procurement consultant…. So far, we have not located any invoices for the work performed in relation to this contract.”

“There is a huge possibility that the money that came from Bluestone is part of the money laundering scheme that came to GAH,” Milenovic told the court today. “We didn’t obtain any contract, timetable or supporting documents from them."

“Did you ask for these contracts or ask the magistrate to request these contracts?” asked Ghaznavi.
“I had enough evidence in my possession to form the opinion which I expressed in my report,”  replied the expert.

In reply to a question asked by the judge, Milenovic confirmed that there were other amounts transferred to GAH from Bluestone. “Paragraph…describes many different companies used in this scheme, related companies in which Shaukat Ali was a shareholder. There are a huge number of these.”

Testifying before Milenovic was Vincent Bradley, a senior forensic accountant at Harbinson Mulholland who had assisted the firm’s founder, Jeremy Harbinson in the tasks related to the magisterial inquiry. Harbinson himself did not testify today, the court being told that he was unavailable. Asked about his role in the magisterial inquiry, Bradley began by clarifying that Harbinson Forensics Ltd had no involvement in the asset freezing order.

Bradley, an Irish chartered accountant with 20 years experience in forensic accounting explained that he was one of several authors of the report, subcontracted to Jeremy Harbinson.

The witness distinguished between Mt Everest FZ and Mt Everest BT, the latter of which he had not been provided records for, but which had featured in contracts with Bluestone. “Upwards of €5 million were transferred to Mt Everest.” Bradley told the court, although he could not say offhand whether it was FZ or BT.

Asked by Ghaznavi to specify the figure that Mt Everest FZ received from the hospital concession, Bradley said it had received €1.47 million from Bluestone.

“Did you ask Mt Everest FZ for their bank statements?” probed the lawyer.
“I don’t think it is the role of forensic accounts to approach the subject for documents,” Bradley replied. “That would be the magistrate’s job.”

Ghaznavi asked about GAH, but Bradley demurred, explaining that Jeremy Harbinson had dealt with that aspect of the report, and not him.

Much to the defence lawyers’ frustration, Bradley was unable to answer other questions put to him about a number of other aspects of the report, as he had not contributed to those aspects, either. 

After Bradley explained that he only had a general understanding of Shaukat Ali’s role in the overall project, Judge Grima asked him to outline the plaintiff’s role, and whether he could link it to a value. The witness replied that, given Shaukat Ali’s prominent role in the VGH / Bluestone arrangements as documented in Malta, “that [figure] runs into multiple millions.”

With reference to the report, which estimated “Shaukat Ali and Family” as having received some €15 million, Bradley explained that the documented amounts paid directly from Malta as concession funds to the Shaukat Ali family were €7.7 million “but as you know we don’t have records from America, Switzerland Tunisia or Dubai.”

“We know that payments were made from the US to Switzerland with respect to the Shaukat family, around $400,000 to $500,000 from the concession.”

At a point, the judge had to stop Ghaznavi bombarding the witness with questions before the witness could finish giving his answers.

“Did you identify the amount that Shaukat Ali gained or received through concession funds to amount to €30 million? Individually, not as a family, ” asked the lawyer.

“It is not possible to establish [the full amount] based on the documentation available,” Bradley replied.

Cross-examined by prosecutor Shelby Aquilina from the Office of the Attorney General, Bradley confirmed that he had not compiled the amounts used in the freezing order.

The many different jurisdictions had not all cooperated with the requests for accounts so the data was incomplete.

Asked whether amounts not arising from fraud had been taken into account, the witness replied that it was not relevant to the exercise the firm had been tasked with. “Both the NAO and the Maltese courts have concluded that the VGH deal is fraudulent and so everything that went through it is [also] fraudulent because the concession was irregularly awarded,”

Aquilina asked whether Mt Everest FZ could have received in excess of €5 million from the concession, but Bradley replied that  “because we don’t have access to bank statements and no full visibility on what came from America, Libya and so on, it was [just] a headline figure.”

Ghaznavi pointed out that the Harbinson report states that, “It is difficult to accurately estimate the total financial benefit the Ali family received from their involvement with the Concession due to lack of the necessary records. However, in total we estimate it was probably well in excess of €10M and quite possibly double that.”

“Am I correct in stating that the €20 million figure is the estimate for the whole family, and all the companies?” asked the lawyer.
Bradley replied that the €7.7 million had been positively identified in the report, but that “Mr. Harbinson went further and suggested that the true figure is in the region of 10 to 20 million.”