‘Orders from Castille’ lead to misappropriation charges after out-of-court settlement

A letter reportedly sent to the Office of the Prime Minister regarding a serious breach of security at Bank of Valletta's San Gwann branch, led police to prosecute a San Gwann couple for allegedly misappropriating €40,000, when the same bank had in fact bought the silence of the parties involved, in a bid not to reveal shortcomings in the security system.

The security breach came to light in Magistrate Carol Peralta's courtroom earlier this week as Police prosecuted a couple from San Gwann, for allegedly misappropriating €40,000 from their own safety deposit box, which they had been using for the past 23 years.

The case is currently being heard behind closed doors as the court upheld a request by Bank of Valletta, which has invoked security concerns.

However this newspaper is informed that the case hinges on a mishap involving a BOV employee at the San Gwann branch, who allegedly issued keys to the same safety deposit box to two different couples, and has since filed a claim for unfair demotion against the bank.

MaltaToday is informed that the San Gwann couple which stands accused with the alleged misappropriation had been using the box for the past 23 years, when in an ensuing mistake in bank procedures, another couple was issued a key for the same box.

Both couples had subsequently claimed that €40,000 in cash that was discovered inside the box was theirs.

The situation led to an immediate internal investigation, which also led the bank to suspend an employee, identified as Gaetano Falzon, who later filed a judicial protest against the bank for unfair demotion.

After weeks of investigations, Bank of Valletta reached an out-of-court settlement and paid both couples €40,000 in "full and final settlement" of their respective claims for the money found in the box.

MaltaToday is also informed that although the bank reached a final settlement with both clients, the police investigations into misappropriation against the San Gwann couple had been initiated upon "orders from Castille", specifically when the matter was referred to the Commissioner of Police, who acted after correspondence received at the Office of the Prime Minister was forwarded to him.

On their part, the San Gwann couple are claiming that they are being unjustly accused of misappropriating their own savings.

Gaetano Falzon, the former branch custodian at BOV's San Gwann branch, had filed a judicial protest against the bank last February, claiming unfair demotion and accusing the bank of paying off third parties to "buy their silence" on the loss of money from their safety deposit boxes.

Falzon said he was unfairly demoted by the bank after disciplinary steps were taken against him, in connection with his duties administering the branch's safety deposit boxes.

In his protest, Falzon said he denied the accusations brought against him by the bank, claiming the incident was solely due to an unsafe system because of a "lack of effective control" on the copies of the keys of the safety deposit boxes and a software defect.

Additionally, Falzon accused the bank of paying a considerable sum of money to "buy the silence of dishonest persons who were indicating they will expose the bank's shortcomings".

In the incident, the same safety box was erroneously allocated to two depositors. When one depositor flagged the mix-up, because they realised their safety box contained items that did not belong to them, the bank - according to Falzon - compensated them in a bid so that the matter is not given publicity.

Falzon also said the disciplinary procedures were vitiated by a conflict of interest, because the internal audit department had for several years failed to rectify the safety system. Only after the incident did the department recommend a change in the system.

He claimed he was the "sacrificial lamb" for the lack of control and wrong executive decisions that were the cause of the incident.

The judicial protest called on the bank to annul the disciplinary action and reconfirm him in his employment grade as well as pay him damages for his sacking, and to start procedures to recoup the money paid to the third parties to remain silent on the incident.