Maltese lawyer Robert Montalto and Cypriot lawyer Ionnis Moditis each got €60,000 for their services in a case that enabled ‘dirty oil’ suspect Gordon Debono, whose assets are frozen, to move over €1 million to his wife’s company in Dubai through the Courts, according to documents filed.

Court documents show that the lawyers were paid the amount on the settlement of the transfer of funds related to a case exposed by The Shift that revealed how Debono and his wife, Yvette, were using the Courts to move large amounts of money that the family should not be able to access.

Debono was arrested in Sicily, in October 2017, together with Darren Debono. They are facing charges in Italy, and their assets are frozen as both are subject to sanctions by the Office of Foreign Assets Control, the financial intelligence and enforcement agency of the US Treasury Department.

The Shift revealed last month how the Debono family had devised a way of getting their hands on their assets frozen on suspicion of illegal trade. Debono’s wife acquired a shell company in Dubai called International Properties and Investments Ltd in March 2018 and argued in Court that a company in Belize owed it €1.5 million plus 3.5% interest.

Further investigation of Court records showed that the Belize company that Yvette Debono claimed owed it money was owned and controlled by her husband. This effectively means that husband and wife were transferring assets through offshore companies that they have no legal right to access with the approval of the Maltese Courts.

READ: Are Maltese Courts enabling Gordon Debono to launder dirty money?

Part of that money being transferred was held at Satabank, which is under administration, leading the Malta Financial Services Authority (MFSA) to contest the garnishee order. The Court ruled against the MFSA. But, contrary to assumptions in news reports, that ruling would not have dented the plans of the Debono family. That is because the bulk of the money being transferred to a safe haven for the Debonos was not held at Satabank.

The Shift can reveal another twist in family’s manoeuvres.  Sources note that the balances held up at Satabank were in the region of €100,000. The million euro transfer came from another source.

Plot twist

The details were buried in court documents filed in relation to the case. Court documents seen by The Shift show that Debono’s Oil and Gas Consulting Limited, a Belize company, was owed a significant amount (€1,186,776) from a little known petroleum trading company based in Malta and ultimately owned by French individuals, Eninco Trading Limited.

The transfer was approved by the Maltese courts and the money flowed through the Exchequer of the Maltese government’s account. It is not clear whether the Courts knew that, in effect, money was in this manner being moved from Gordon Debono, who is the subject of US Sanctions, to his wife’s control in Dubai.

According to Court filings, the 2017 arrests and US sanctions interrupted fuel trades between Debono’s Belize company and this Maltese petroleum trading company, resulting in a significant amount owed to Debono’s company.

It is significant that Debono chose a district Court in a tourist town in Cyprus to make the claim, which explains the €60,000 given to Cypriot lawyer Moditis. Once the Court in Cyprus ruled, in April 2019, in favour of Debono’s wife’s newly acquired Dubai company, International Properties and Investments Ltd, the company sought to have that judgment recognised in Malta.

Under EU law, judgments from one Member State are generally recognised with little discretion on the part of the recognising State, which has been used to justify the decision by the Maltese Courts. Yet, EU law includes safeguards such as the right to object in “the public interest” which, while narrow, would permit objections to cases which among other things circumvent money laundering laws, according to lawyers consulted by The Shift.

In addition, the company proceeded to issue a garnishee order enforcing that judgement in Malta. Alongside the usual list of Maltese banks (including Satabank, as an after-thought in a handwritten note), Debono’s wife’s company specifically included Eninco Trading Limited. Twice.

While the MFSA sought (unsuccessfully) to contest the garnishee order on behalf of the scandal-stricken Satabank, Eninco Trading Ltd did not contest the warrant.

On 3 May, 2019, just days after the court-approved garnishee order was issued, Eninco filed a reply in court noting that it has no assets in Malta and banks overseas and will need more time to comply with the warrant.

A month later, Eninco filed a note in court confirming that it owes Debono’s Oil and Gas Consulting Limited the sum of €1,186,776 and was accordingly depositing it in Court. Although fuel is often traded through a series of intermediaries, The Shift is not aware of information linking these transactions with Eninco with those forming the subject of the Dirty Oil investigation.

The note filed in court by Eninco claimed that Debono’s Oil and Gas Consulting Ltd had asked for the money but that it was not possible to pay it in any other way since Debono’s company did not have an EU bank account. Yet, several banks in Malta hold Debono’s frozen assets.

That same day, each of Debono’s Belize company and his wife’s Dubai company acknowledged the deposit.

A day later, Debono’s company filed a reply in Court noting that the money deposited in Court was to be “split” three ways: €1,068,100 to go to Debono’s wife’s company in Dubai, just under €60,000 to go to Debono’s Maltese lawyer Montalto, and an equal amount to go to Cypriot lawyer Moditis, the lawyer whose name appears in the underlying Cypriot judgment.

With the recognition in Malta of the Cypriot judgment, any amounts deposited in Court would, if not already withdrawn, be able to be cashed out. In fact the “cedola” of deposit in Court bears a “zbankati” (cashed out) stamp in red (pictured above).

Meanwhile, there is another similar case before the Maltese Courts for recognition of a Cypriot judgment that is again in favour of Debono’s wife’s Dubai company against another company, reportedly also owned by Debono (Marine Offshore Investments Ltd). In that case, the amount is €1.3 million.

If that case follows the same outcome, Debono would have succeeded in moving over €2 million of what should be frozen assets through these two cases alone.