Cancer treatment project used to siphon off public funds

A multi-million-euro facility aimed at improving the treatment of cancer and Alzheimers for Maltese patients was used as a tool by the same group of individuals involved in the hospitals’ heist to siphon off millions of taxpayer funds, the magisterial inquiry has found.

Malta Enterprise, Technoline, and several professionals, including lawyer David Meli and auditor Chris Spiteri, were among the main enablers of this fraud, the conclusions of the inquiry show.

When it became evident that Vitals Global Healthcare (VGH) had misappropriated public funds to profit from the cancer treatment project, the Office of the Prime Minister not only failed to remedy the situation but also attempted to conceal the fraud.

From Josie Muscat to Malta Enterprise

The inquiry found that the Cyclotron project – a new cancer facility that produces a radioactive tracer for nuclear imaging during PET/CT scans – was originally the brainchild of Josie Muscat, the owner of St James Hospital, Malta’s largest private healthcare facility.

In 2014, Josie Muscat presented a business plan to Malta Enterprise through Brian Tonna of Nexia BT for financial assistance in the €7 million project.

At the same time, Josie Muscat was discussing with Ram Tumuluri the selling of a 49% stake in his St James Hospital to VGH, while Tumuluri was discussing with the government the concession of the three public hospitals.

The inquiry found that Josie Muscat was promised €2 million “for his efforts in securing the concession, ” although he had nothing to do with the government.

Still, when the deal on the sale of St James fell through, two Italian businessmen from Taomac Ltd immediately replaced Josie Muscat on the cancer project and called the company MTrace Plc.

Based on the data it acquired, the inquiry concluded that all the participants in the cancer facility project, including Josie Muscat, were merely frontmen, as Shaukat Ali, the same behind the VGH concession, was the real ‘promoter’ of the cancer project.

Malta Enterprise went along with the project with few questions raised. It approved a soft loan of 69% of the project (€4.7 million) and granted land at the Life Sciences Park for the facility.

In the meantime, as soon as VGH was formally given the hospitals’ concession in 2015, a company named Vitals Procurement Ltd, incorporated in Jersey and closely related to VGH, moved in and bought the shares of MTrace Plc, which The Shift revealed in January 2019.

Malta Enterprise rapidly endorsed the sale.

The inquiry found that since VGH did not even have the funds to cover part of the share capital to buy MTrace Plc, around €2 million was paid out from public funds, supposedly used for the hospital concession, through fraudulent invoices issued by Technoline and other companies involved in the cancer treatment project.

Project collapse and takeover by Malta Enterprise

In 2018, when Steward took over the concession from VGH, it had tried, in vain, to sell its cancer treatment project, which was now accumulating heavy debts.

Disgraced former prime minister Joseph Muscat’s chief of staff, Keith Schembri, was kept informed of the progress through Armin Ernst, the CEO of VGH and then Steward Healthcare.

In some instances, Schembri also forwarded emails he received to Shaukat Ali using his private email addresses.

Still, no progress was registered, and the project was shelved.

The inquiry describes how, despite Ernst informing Keith Schembri in writing of the fraud committed through public funds in this deal in 2018, the OPM remained silent and took no action. The inquiry noted that this was astonishing.

Armin Ernst informed Keith Schembri in writing that the cancer treatment facility was acquired by fraud.

As the media started zooming in on this part of the scandal, the government decided to take over the project from Steward.

However, instead of ensuring that the project was returned to its owners — the Maltese public — Malta Enterprise signed a new agreement to acquire MTrace Plc from Steward, paying it for the company originally bought using public funds.

The final agreement on behalf of Malta Enterprise was signed by CEO Kurt Farrugia, who was Head of Communications at the Office of the Prime Minister when Muscat and Schembri were at the helm.


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22 days ago

Nothing surprises me anymore this is Mafialand, and even with all this evidence of Grand theft and murder it’s been pre determined that they will all walk possibly as heroes. While I’m reading this they are galavanting around the world ensuring the money they stole is safe and sound.

21 days ago

Will Kurt Farrugia be investigated?

Victor Fenech
Victor Fenech
19 days ago

Let us not be silly. The Finance Minister for one issued the cheques so he should know . The Prine Minister should know cause he thumbed up the transaction. The other members of Parliament should have known if they have the mettle. All are corrupt thieves or accessories to theft

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