Christian Borg, associates charged over 'multimillion euro fraud', tax evasion, money laundering

Christian Borg of No Deposit Cars infamy, his girlfriend Monique Mizzi, and company director Joe Camenzuli have been formally accused, alongside a number of companies, of defrauding “millions” in VAT and other taxes.

They are charged alongside companies Princess Construction Ltd, Princess Holdings Ltd, Princess Operations Ltd, Zing Rental Ltd, No Deposit Cars Ltd and Lion Funding Ltd.

Borg, 31, and Mizzi, 26, appeared in the dock, assisted by Lawyers Stephen Tonna Lowell, Albert Zerafa, and Ana Thomas. Also in the dock was Joe Camenzuli, in representation of the companies.

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Police Inspectors Tonjoe Farrugia and Robert Azzopardi, assisted by prosecutors Francesco Refalo, Rebekah Spiteri, and Mauro Abela from the Office of the Attorney General, charged the defendants with money laundering and criminal conspiracy. Borg and the companies were further charged with defrauding the Tax Commissioner, making fraudulent gain to the detriment of the Government of Malta, false accounting and other fraud-related offences.

Police Inspector Tonjoe Farrugia explained that the charges were issued following an investigation into VAT fraud and tax evasion by Borg, both in his personal capacity as well as a number of companies that Borg was either a director or shareholder of.

The police had first been asked to investigate by the VAT department, he said, due to “indications that Borg was filing false invoices for hundreds of thousands of euros” on which he was receiving VAT refunds as they had been classed as expenses.

There was also an element of money laundering, added the inspector.

Cross-examined by Tonna Lowell, inspector Farrugia confirmed that a magisterial inquiry had been concluded and arrest warrants had been issued as a result.

The lawyer challenged the information on the basis of which the arrests had been made, citing discrepancies between the amounts noted by auditors.

Inspector Farrugia clarified that discrepancies were only for records pertaining to financial records for one of the years under examination, but that the audit had been conducted over records for many more years than that. 

The Inspector confirmed that the investigation was still ongoing, which led Tonna Lowell to ask why the defendants had been arraigned today “when the case could be resolved administratively.”

“How can financial crimes be resolved administratively?” replied the inspector. “Our investigation concluded that millions had been defrauded from the VAT department.”

Inspector Farrugia insisted that, if anything, only part of the issue could be resolved administratively. 

The defence lawyer suggested that there were “other million euro fraud cases, but this man happens to be named Christian Borg.”

The prosecution requested a freezing order over all of the defendants’ assets, in view of the money laundering charges. The prosecution said that a specific amount to be frozen would be submitted within 90 days.

Tonna Lowell acknowledged that the court’s hands are tied once the prosecution requests a freezing order, but said that negotiations had been ongoing for some time. Now that a freezing order over all the assets for at least 90 days was going to be issued, “everything was going to go to pot.”  

This measure would also overlap other, similar, court orders that were already in place in connection with other proceedings, the lawyer pointed out.

The defendants pleaded not guilty to the charges and requested bail, which was objected to by the prosecution. 

“This investigation has been ongoing for several years. It did not start yesterday,” submitted Refalo. Amongst the evidence that the court would eventually be hearing is “testimony from a number of civilians who had assisted Mr. Borg in the commission of these crimes,” said the prosecutor, warning that there was a risk of evidence being lost if the witnesses were to be approached. 

Not all of the civilian witnesses had testified during the inquiry, added the prosecutor. “Here you have VAT fraud, where a number of receipts had been issued and VAT should not have been claimed by the defendants.” 

“We don’t object to bail for nothing,” Refalo added. “This is important to protect the proceedings.”

Tonna Lowell asked whether the people who were mentioned as having assisted Borg would also face charges, or be pardoned, pointing out that otherwise they would be precluded from testifying. 

“When we say assisted, we mean that they had done so unknowingly.” clarified the prosecutor.

The defence lawyer argued that Borg and Mizzi had necessarily been aware that they were under investigation “for months if not years,” telling the court that Borg had been under bail conditions for that time and had “never breached them.” 

“Borg and Mizzi had all the time in the world to tamper with the evidence, but they did not. The prosecution is objecting on the grounds of a phantom fear that exists only on paper,” said the lawyer, adding that Mizzi also had a young son and had never been in trouble with the law before.

After retiring to chambers to deliberate on the bail request, the court returned to the courtroom to uphold the bail requests, in view of the fact that the evidence was already preserved by the inquiry.

Mizzi’s bail was secured by a €15,000 deposit a €40,000 personal guarantee, while Borg was ordered to deposit €35,000 and provide a €60,000 personal guarantee as bail security.