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GUEST POST: Neutralising The Regulators – How Malta Facilitates Organised Crime

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Malta’s online betting industry became an ATM for the Italian Mafia, the Palermo anti-Mafia prosecutors concluded when they cracked down on a vast Maltese gambling network linked to Cosa Nostra.

Malta’s betting industry generates €1.2 billion annually – a staggering 12% of GDP.  IRPI, a partner of the Organised Crime and Corruption Reporting Project exposed Malta’s betting industry infiltration by organised crime, enabled by complete lack of effective oversight by the Maltese Gaming Authority (MGA), headed by Joesph Cuschieri between 2013 and 2018. 

Cuschieri resigned in disgrace as CEO of MFSA after his Las Vegas trip with, and paid by, Yorgen Fenech was exposed. Cuschieri, President George Vella’s son-in-law, was a close associate and protege’ of Joseph Muscat, who appointed him way beyond his competence.

Under Cuschieri, Malta’s betting industry was hijacked by Italian organised crime. Benedetto Bacchi used Maltese gaming licenses, generating profits of €16 million per month with support from the Ndrangheta. Bacchi was arrested in anti-mafia operation Gameover. He was running 700 betting shops across Italy using an online gambling operator licensed in Malta. 

With close ties to Cosa Nostra, Carlo Cattaneo owned agencies operating under Betaland, another Malta brand. His agencies encouraged gambling on Bet17Nero, an unregulated Maltese site linked to LB group.  LB group was managed by a powerful Cosa Nostra branch from Mazara del Vallo, a city controlled by the boss of bosses Matteo Messina Denaro. MGA only suspended LB group’s license after the Italian investigations in 2018. But MGA refused to state whether this was because of criminal links.

According to the Financial Times, Centurion Bet, another Malta-based company, was used by Ndrangheta to launder money. It operated Bet1128 linked to Puglia’s organised crime syndicate, Sacra Corona Unita. Bet1128 was originally owned by the Martiradonna family who moved the franchise from the UK to Malta as British police prepared to swoop. The family obtained Maltese residence permits. The patriarch, Vito, was subsequently jailed for Mafia association as cashier of Sacra Corona Unita. But Cuschieri’s MGA described Bet1128 as a “solid brand that is fully in line with Maltese and European law”.

Uniq group, Betsolutions 4U and Fenplay Ltd were all subjected to Italian police investigations with the latter suspected of Mafia links. Cuschieri was caught napping. If it weren’t for Italian prosecutors, all these companies would still have their Maltese licenses.

But Cuschieri was on good terms with Yorgen Fenech. Vincenzo Romeo, the nephew of Nitto Santapaola, the Cosa Nostra boss, came to Malta in April 2015. He linked up with Massimo Lagana who collaborated with Planetwin365 to organize live poker at Yorgen Fenech’s Portomaso Casino. Both Romeo and Lagana were arrested in Messina in 2017 for Mafia-type association and illegal gambling.

Cuschieri was finally forced to resign. He had the cheek to insist he was not admitting misconduct or wrongdoing.  Ironically Clyde Caruana thanked Cuschieri for “strengthening the regulatory aspect”, making no reference to Cuschieri’s MGA disaster.  Prime Minister Robert Abela also defended Cuschieri. Instead of immediately sacking him, Abela cast doubt on the intentions of the leakers, implying it was PN retaliating for President Vella’s failure to remove Adrian Delia.

With clear proof of criminal organisations’ infiltration of Malta’s betting industry, Clyde Caruana should be panicking. With Moneyval breathing down Malta’s neck and the threat of greylisting, he should be desperately strengthening regulation. Instead, he dismantles it.

Clyde Caruana declared his intention on TVM’s XTRA to neutralise regulators. Why? Because businessmen are complaining that inspections take too long. 

Caruana will appoint a group of “experts” to evaluate MFSA and FIAU. The government that allows institutions to work, plans to castrate them.  According to the Minister “MFSA and FIAU should not stifle business”. 

Yet again, the country will protect those breaching the rules and muzzle those enforcing them.  For Caruana, businesses should not be hindered – even if they wreak havoc with their Europe-wide crimes. MFSA and FIAU should back off. 

Even Mario Demarco took the side of offending businesses. “Fines have to be proportionate to a company’s turnover” he declared. No. Fines must be commensurate with the seriousness of the breach.  A small company enabling international terrorism through money laundering should not get a small fine because its turnover is small.

As Caruana and Demarco stick their necks out for errant businesses, they damage the prospects of law-abiding ones. Caruana guarantees that Malta continues to attract rotten shady operators, safe in the knowledge that their wrongdoing will be overlooked. Unscrupulous companies will willingly “donate” funds to secure contracts they could never dream of winning in fair, open competition. Which is why some politicians love these businesses and not the ones rigidly adhering to the rules, which value integrity, meticulously record every meeting and interaction with politicians, and are transparent and clean.  You wouldn’t find them on Joseph Muscat’s fourth floor, or building Ian Borg’s matrimonial home or pampering Zammit Lewis at the Luxury Evian Hilton. 

These are corrupt bargains. The minister muzzles the regulator while they break the rules. As Electrogas shareholder Paul Apap Bologna elegantly put it: “We will do our bit if you do yours”.

MGA, MFSA and FIAU allowed Malta to become an international crime haven. But Clyde Caruana thinks the work done by the regulators is sufficient. Even the planned financial crime agency will be scrapped. MFSA and FIAU must heed his order – to take it easy.

It sounds petty. But it’s necessary for survival. Survival of prominent politicians, mired in links to criminals, who would be exposed if regulators did their job. Survival of Labour, funded by companies nefariously awarded huge direct orders and contracts. Survival of our economy, dependent on unscrupulous shady businesses, given free rein to operate without “being stifled” by regulators.

Clyde Caruana ensures the country remains a pirate’s den, attracting organised crime and mobsters, safe in the knowledge that the regulators are the ones kept in check. Let’s hope Moneyval is looking away now.

Prof Kevin Cassar is Consultant vascular surgeon at Mater Dei Hospital and Professor of Surgery at the University of Malta.

Lovin Malta is open to external contributions that are well written and thought-provoking. If you would like your commentary to be featured as a guest post, please write to [email protected], add Guest Post in the subject line and attach a profile photo for us to use near your byline. Contributions are subject to editing and do not necessarily represent Lovin Malta’s views.

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Julian doesn’t like to talk about himself. But if he did, he would let you know that he’s into anything that has got to do with politics, the environment, social issues, and human interest stories.

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