BOV loses plea for closed door proceedings in safety deposit box blunder

Retired professional photographer Anthony Mangion wept in Magistrate Carol Peralta's court room, as he testified about his shock at discovering that someone else was using the same safety deposit box he had been given just a few weeks earlier at Bank of Valletta's San Gwann branch.

Mangion said he had placed €40,000 in the safety deposit box at the San Gwann branch, where he held his business accounts for years, given that his shop was a mere four doors away.

Mangion's evidence was given in open court, after Magistrate Carol Peralta rejected a plea by Bank of Valletta's lawyer Tonio Azzopardi, who called on the court to hear the proceedings behind closed doors over "security issues."

His argument however was shot down by lawyer Giannella de Marco, who appeared for Mangion, claiming that there was no security matter for the bank, "except a very embarrassing matter which the bank was attempting to hide from public knowledge."

The witness wept as he told Magistrate Peralta that he had placed the money inside the box as security for his daughter, who suffers from cerebral palsy.

"Do you know how it feels that you are haunted every day by the prospect of leaving behind you a child with such a condition?" Mangion said as he sobbed on the witness stand, with his daughter sitting behind him inside the court room.

He added that his worst nightmare was to die, leaving his daughter without any money to support herself.

Mangion was summoned as a witness during a criminal case where police are charging a couple, Victor and Maria Xuereb of San Gwann, with misappropriating €40,000. They are the other couple who also had a key to safety deposit box number '75' at the San Gwann Branch, and had been using it every week for the past 23 years.

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

The Xuereb's were however prosecuted after a letter reportedly sent to the Office of the Prime Minister regarding the alleged serious breach of security at Bank of Valletta's San Gwann branch, was forwarded to the Commissioner of Police for investigation.

The letter had alleged that 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 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.

After weeks of internal 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.

Evidence

In his evidence, Anthony Mangion explained that he had gone to Bank of Valletta in San Gwann on April 1, 2010 to obtain a safety deposit box, and was accompanied to the vault by the branch's cash custodian Gaetan Falzon who opened the box in front of him.

"When he opened the box, we found a small empty container inside, which Falzon said it must have been left behind by somebody else. He also said that he would keep it himself to put his pencils in it," Mangion said, adding that Falzon then moved away and stayed by the doorway, given that it is bank policy to leave the client alone with the safety deposit box.

He said that he deposited €40,000 inside the box. The money was wrapped in strips of paper which he used as the receipts to clients for photography films handed in for developing prints.

Mangion explained that when he returned two weeks later - this time accompanied by his wife - he opened the security box, and found that besides his money there was also a stash of US dollars.

He immediately called the manager who came to see, and verified that all his money was there.

"The bank asked me if I wanted another safety deposit box, and I told them there and then, that I didn't trust them. For all I know I could have lost all my life savings," Mangion said, adding that he refused the bank's offer to be given another box instead, stressing again that he "wasn't trust them."

At this point, Magistrate Carol Peralta asked the witness twice to confirm that none of his money was found missing. "Yes, all of my money was there, I found US dollars with them, but the point is that I risked losing all my money given that somebody else had my same key," Mangion said.

He added that he was subsequently summoned to Bank of Valletta's head office where he explained what happened before an internal board of inquiry.

Before the case was adjourned to next March, lawyers Michael and Lucio Sciriha who are appearing for the accused, said that his clients would be taking the witness stand too to give their version of the facts.

"There will be crying too," Sciriha said, adding that it was shameful that Bank of Valletta was now prosecuting loyal clients.

Demotion

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.