Christian Borg failed to declare €4.7 million in business incomes, FCID tells court

Christian Borg and his construction and rental car companies had claimed VAT refunds on invoices, issued at a time when the issuing person had in fact been behind bars, a court was told today. 

It was just one of a number of astonishing discrepancies discovered during a tax fraud investigation into Borg, his companies and associates, that were detailed in the compilation of evidence against Borg, his girlfriend Monique Mizzi, and company director Joe Camenzuli on Tuesday.

Amongst other things, defendants are accused, together with a number of companies, of defrauding “millions” in VAT and other taxes.

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

Borg, 31, and Mizzi, 26, are accused of money laundering and criminal conspiracy. Camenzuli was also in the dock,  in representation of the defendant companies.

Inspector Robert Azzopardi from the Financial Crimes Investigation Department testified about the multi-pronged investigation into tax evasion, VAT fraud, as well as money laundering. 

The police investigation revealed that Borg also had business interests and bank accounts abroad in the UK, Germany and Cyprus, as well as cryptocurrency wallets in the British Virgin Islands and Cyprus.

After the police obtained information from Germany and Cyprus, searches were carried out at the No Deposit Cars showroom in Qawra, Borg’s flat in Swieqi, and properties in Tarxien, Birkirkara.

Borg’s auditors, Nathaniel Borg and Roderick Galea, told police their professional relationship with Borg started in 2021, and that they had found substantial discrepancies between declared income and actual income and assets. They required Borg to settle the issue before taking up the brief, upon which Borg sent them a volume of documents – mostly invoices for car rentals over the years – to allow them to compute the income and settle the tax dues.

Since 2015, the figure for undeclared total income stood at €4.7 million, the inspector said, exhibiting a digital copy of the audit data in court. 

Police inquiries with counterparts overseas also revealed that Borg had bought a €710,000 yacht in the UK, where three other companies were registered in Borg’s name.

The second prong of the investigation was into VAT fraud, suspecting Borg that he was claiming VAT refunds for expenses which were either inflated or fabricated altogether. The claims were made on repairs and spray jobs for cars and for renovation works at properties which Borg or the companies had bought or leased.

The VAT department noticed that all the vehicle repair invoices were issued by the same supplier, mechanic Anthony Balzan. But some invoices had been issued at a time when Balzan was in prison, and could not have possibly provided the services claimed.

In addition, one company – Stronghold Construction – had somehow issued four VAT receipts before it had even been assigned a VAT number. “Stronghold had just two employees and at a time when his business was apparently flourishing, Balzan had just one who, Jobsplus records show, had been made redundant due to lack of business.” Some had no employees at all.

The €1 million in expenses that had been declared by Borg and his companies for the purposes of VAT refunds, implied that Stronghold should have shown at least €1 million in declared income, but the court was told that this was not the case.

The court was told that Borg and his companies had even claimed VAT refunds on simultaneous, but mutually-exclusive, works, such as excavation and construction works at the same site.

Inspector Azzopardi testified that invoices which had been issued by mechanic Anthony Balzan had raised suspicions due to their generic, repetitive description and the fact that they specified dates that were “so close to each other that it was impossible for the work to have been done in that time.” Some invoices lacked even the number plate of the vehicle allegedly serviced.

In connection with his planning application for a subterranean car-wash, Borg had claimed €80,000 for garage doors, “when there was no garage there,” said the inspector, going on to list other fictitious claims: VAT claimed on air-conditioning units which weren’t there and on similarly phantom furnishings.

The Luqa car-wash turned out to be “literally just a yard, small office and a toilet and a tent at the back to wash cars” and did not reflect the construction work described in the invoices.

“The more the VAT department looked, the more discrepancies they found,” he said.

The compilation of evidence will continue in October.

The defendants are being assisted by lawyers Stephen Tonna Lowell, Albert Zerafa, and Ana Thomas. 

Police Inspectors Tomjoe Farrugia and Robert Azzopardi are prosecuting, together with lawyers Francesco Refalo, Rebekah Spiteri and Mauro Abela from the Office of the Attorney General.