Cutajar couldn’t refund property commission because she’d ‘already spent her share’

Report concludes that Cutajar was involved in property deal with Yorgen Fenech, failed to declare brokerage fees

 

Damning testimony from Rosianne Cutajar’s associate, the ‘sensar’ Charles Farrugia, to Standards Commissioner George Hyzler appears to support the accusation that she received tens of thousands of euros in commission money from both sides of a planned property transaction involving accused murderer Yorgen Fenech.

Farrugia admits, in his evidence, that he told lawyer Pierre Lofaro that Cutajar had “already spent her share” on a house. The Standards Commissioner’s report, published today by agreement of both sides of the House at the Standards in Public Life Committee, is accompanied by two volumes of evidence consisting of documents related to interviews held by the Standards Commissioner, including sworn affidavits, transcripts of conversations and documents submitted by those involved in the sale of a property that was estimated at €3 million.

The Standard Commissioner’s report, following a six-month investigation into whether Cutajar was acting as a broker for the Mdina property sale, includes extensive transcripts of evidence given by Carmelo Farrugia, a close associate and friend of disgraced former Parliamentary Secretary Cutajar, as well as the seller, Joseph Camilleri, who sought to have the commission he’d paid returned after the transaction fell through following Fenech’s arrest for the murder of journalist Daphne Caruana Galizia.

Cutajar, whose February resignation from her parliamentary secretary role was confirmed this morning after the publication of Hyzler’s report, appears to finally have been cut loose by the Labour party over this scandal. Both PL representatives at the parliamentary committee that met this morning to discuss the report agreed immediately that the report should be published, in contrast to the way they’ve attempted to block previous reports by the Standards Commissioner.

Two versions of events

Standards commissioner George Hyzler said he was faced with “two diametrically opposed” versions of events. The report dissects the two versions of events using the “preponderance of probabilities”, or the analysis of the most likely version based on the credibility of what is submitted by the parties.

One version of events was provided by property seller Joseph Camilleri, whose sworn testimony is backed up by his lawyer, Pierre Lofaro, and an affidavit overseen by notary and Labour MP Ian Castaldi Paris.

The “opposing” version of events was provided by Charles ‘it-Tikka’ Farrugia, a long-time associate and employee of Rosianne Cutajar, as well as Cutajar herself who furnished specific bits of evidence as well as testimonies from her former driver and her father.

When comparing the two versions, Hyzler concluded that “there’s a number of facts and circumstances that, in my opinion, give me the necessary conviction to state that Hon. Cutajar was paid brokerage fees in connection with the Mdina property sale”.

Although Cutajar’s name was excluded from promise-of-sale contracts due to her associate’s insistence on avoiding written references and fees were paid in cash transactions, making them unrecorded, the commissioner adds that “it looks like there was a prima facie breach of the act in standards of public life” given that she had also failed to declare her income from the sale.

In other words, the commissioner’s investigation, in view of the powers the office has, concluded that of the three allegations originally made by the complainant, independent candidate Arnold Cassola, the two referring to Cutajar’s role in the sale as well as her failure to declare the property sale in her asset declaration of that year turned out to be valid.

In relation to Cutajar’s role in the sale, Hyzler placed the onus of determining Cutajar’s fate on the standards in public life committee, which agreed to reconvene on 12 July to discuss the report with the Commissioner.

As for her failure to declare the money she made from the transaction and the subsequent evasion of tax payment on the sale, Hyzler recommended that the investigation should be followed up by the commissioner for inland revenue.

The third allegation refers to the fact that Cutajar, an MP at the time, was doing business with Fenech who had been outed as the owner of 17 Black, thus making her involvement in the deal a more aggravated offence. The Commissioner declared that he was unable to investigate this allegation due to time-barring constraints.

Established facts

In spite of the differing versions, the standards commissioner did manage to establish facts that were corroborated and confirmed by both parties.

Crucially, both parties confirmed that Cutajar was involved in the process of finding a buyer, that she was present when Yorgen Fenech went for the first viewing of the property, along with Farrugia, and that she was present when brokerage fees were paid at Marsamxett’s now-infamous Porticello (linked to Darren Debono facing charges of fuel smuggling).

Although both Farrugia and Cutajar explicitly denied that Cutajar was paid any brokerage fee money barring a €9,000 “gift” from Yorgen Fenech, she did claim that she held €31,000 in fees and passed them on from Fenech to Farrugia, who in turn claimed that he was the sole broker in the deal.

As for the original agreement, 3% of the total amount would be paid in brokerage fees. Farrugia had originally requested a cut of 1.5% for himself before claiming a further 1.5% for “a second broker who had an interested buyer”.

The total 3% fee, which amounts to €93,000, was paid by Camilleri on 14 May 2019 after he had received Yorgen Fenech’s cash deposit of €310,000 as outlined by the promise-of-sale agreement.

The advance cash deposit, followed by a €1.2 million loan from Tumas Group on 15 October 2019, was also meant to assist Camilleri in purchasing the property itself.

The Mdina property originally belonged to Henley Estates Malta Ltd, a subsidiary of the Henley & Partners Group. The property was then sold to Camilleri’s company, Green Eyes Ltd, via another, earlier promise-of-sale agreement with someone Farrugia referred to “the Chinese man,” though the sale had not yet been completed.

Despite repeated extensions on both promise-of-sale agreements, Yorgen Fenech’s arrest in relation to the murder of Daphne Caruana Galizia on 20 November 2019 meant he was no longer able to continue with the deal. Camilleri, however, needed the cash to be able to complete his own purchase of the house from the “Chinese man,” and Fenech’s uncle, Ray Fenech loaned him the money to do so, according to declarations presented to the Standards Commissioner.

It was then that Camilleri, aided by his lawyer, began chasing both Farrugia and Cutajar for repayment of the brokerage fees.

In his efforts to recover the money, Camilleri secretly recorded a conversation with Farrugia on 17 February 2020, though the recording proved to be inconclusive since it did not mention Cutajar by name but did include references to a female third party.

Camilleri had been repeatedly asking for repayment but only managed to get €2,000 back, according to his statements to the commissioner.

“She received commissions as explained (€46,500) and so far she has only returned €2,000 in cash,” he said. In October of 2019, Camilleri had asked Farrugia and Cutajar to return €4,000 in fees, as part of the loan agreement with Fenech consisted of slashing the overall price of the sale by €100,000.

At the time, Camilleri had asked for a partial refund of €4,000 in light of the reduced price from the overall sale. Camilleri says she first gave him a cheque and then changed her mind and paid him in cash. She denied this when questioned by Hyzler.

Questionable testimonies

Hyzler repeatedly questioned Farrugia’s inconsistent version of events: the ‘sensar‘ admitted that he lied to Camilleri repeatedly in order to “soften his heart” in attempts to avoid having to return the brokerage fee to Camilleri after the collapse of the property deal.

When Camilleri continued to insist on full repayment a year later, Farrugia said that Cutajar had spent her share on buying property in Qormi in another attempt to convince Camilleri to renounce his legal claims to a refund.

Farrugia’s tone became more defensive when asked about repayment in a chance encounter with Lofaro. Farrugia informed the lawyer that another advocate had advised them not to pay as there were no grounds for the claim.

Farrugia was also caught flat-out contradicting himself when he originally denied that he had received €31,000 for his role in the sale from Yorgen Fenech only to later admit that he had, in fact, done so.

He also disproved himself when he originally said that he felt that the money he was paid was given to him “buona gratia for managing to pull the promise-of-sale together and was therefore awarded outside of the contract” while simultaneously referring to brokerage fees he felt entitled to for his role later on in the course of the investigation.

Hyzler added that Farrugia’s credibility was further undermined when contrasted with what Cutajar’s lawyer, Edward Gatt, was claiming. His arguments implied that Farrugia had “led her into trouble” and was using her and her political position to further his own financial ends by imposing pressure on the seller.

“In spite of the fact that Farrugia repeatedly used Cutajar as an excuse (in terms of being unable to repay the fees), Farrugia remains her intimate friend,” Hyzler said, arguing that if he were really trying to undermine Cutajar, this would not be the case.

Cutajar, in turn, denied that she had used brokerage fee proceeds to purchase property in Qormi, presenting bank statements that showed that she had paid for it from money she had previously saved up.

However, the commissioner noted that this merely proved that the Qormi property was not purchased with brokerage fees from the Mdina sale, not that she did not play a role in the sale.

Cutajar also presented screenshots of WhatsApp chats with Yorgen Fenech, which had to be released by the police under a specific request from the former junior minister after Hyzler was repeatedly denied full access for the purposes of the investigation.

While the commissioner did not publish the chats he had access to, the committee for standards in public life can choose to request them at next week’s sitting.

                           
                               
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bertu
bertu
3 months ago

How many years did it take for your leader to pay his due taxes??? Shame on him he is a tax evader and involvled in criminality !! Republika taz zokk

Godfrey Leone Ganado
Godfrey Leone Ganado
3 months ago

This report should be fodder for Moneyval and the FATF, to realise how generous they were in painting Malta in grey.
Cash transactions, especially when the amounts are substantial, treated with secrecy, and paid/transferred in unorthodox ways like being passed under the table, automatically give a hint of moneylaundering.
The involvement of Henley Estates, a Chinese National owning a very expensive property in Mdina and possibly being an IIP beneficiary, add to my opinion, that this transaction should be taken up for an investigation by the Police Economic Crimes Unit/the FIAU, who should look into the flow of foreign funds for the purchase of the property, the receiving bank of the funds, and all due diligence procedures carried out on the Chinese National. I also hope that the receiving bank was not Pilatus Bank with a referral by Joseph Muscat/Keith Schembri/Konrad Mizzi.
In conclusion, I highly question how Malta can ever achieve political maturity and respect, with the rock-bottom standards of candidates and representatives like Ms Cutajar and many of her Parliamentary colleagues.

Godfrey Leone Ganado
Godfrey Leone Ganado
3 months ago

Rosianne Cutajar, in her annual declaration of assets to Parliament, includes a joint bank current account. It would be interesting to know who the other joint holder/s, is/are.
I also emphasise the urgent need to radically restructure the declaration form, and to reinstate the income/assets/liabilities of the spouses/partners, and also to attach public registry searches and detail all investments held since their appointment as MP’s.
The Annual declaration should also be extended to politically exposed persons and persons of trust.

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