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An obscure footnote in the announcement concerning the recent guilty jury verdict in the multi-billion dollar Federal renewable fuel tax fraud has drawn attention to financial institutions in the Republic of Malta, regarding global efforts to launder $511m paid to the fraudsters in the United States, by the Internal Revenue Service. The US Attorney who obtained the conviction cryptically thanked law enforcement in Luxembourg and Malta for their contributions to the investigation, fueling (no pun intended) intense speculation regarding which banks in those two countries were involved.
The players, an unlikely duo composed of an Armenian-American with a long record of scrapes with the law, and the Kingston family, polygamous Mormon businessmen from Utah, conspired together to build a totally bogus record of manufacturing, and selling, biofuel, made from discarded animal fats, which result in large IRS tax credits. The result of their imaginative and complex fraud was the payment of $511m from the Internal Revenue Service. The Kingston family pled out; Lev Dermen was found guilty.
The scheme was uncovered by law enforcement. The US Attorney for the District of Utah, John Huber, aptly stated:
These guilty verdicts show that no amount of bank accounts, shell companies,
burner phones, or transfers of millions of dollars to foreign countries, will stop
the Department of Justice, the US Attorney's Office, and our law enforcement
partners from tracking down money stolen from the government, and holding
criminals responsible for their wrongdoing.
The principal defendants are looking at Federal prison terms of 20 and 30 years, respectively.
Now, how does Malta figure into the case ? Three billion dollars in purported sales proceeds were moved around the world's tax havens by the defendants, or on their orders, to give the false impression of huge biofuel sales. While we do not yet know which Maltes banks were involved, let us bring up these possible candidates:
(1) SATABANK ?: The Bulgarian owner of this closed Maltese bank was formerly involved in e-commerce in Luxembourg. Was Satabank engaged in moving the biofuel money from one tax haven bank to another, including through Luxembourg and Malta ?
(2) PILATUS BANK ?: Ali Sadr Hasheminejad, the now-convicted Iranian owner of the now defunct bank, is our second suspect. Pilatus has been linked to the facilitation of multiple money laundering operations.
(3) TURKISH BANKS IN MALTA ?: Three known Turkish banks operating in Malta have been mentioned as possible facilitators, but until documentary evidence from the criminal case is made publicly available, we cannot say which banks were involved in the laundering of biofuel "sales We trust, as more information becomes available, that we can identify the guilty party or parties.
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