One of the VAT Department officials implicated in the corruption scandal that rocked the institution last year was acquitted of his involvement yesterday.

Carmelo Caruana, 60, of Birkir­kara who headed the department’s collection section, allegedly acc­ept­ed €500 in return for removing a seizure warrant on a comp-any that owed money to the department.

The collection section is effectively the enforcement arm of the department and is responsible for chasing overdue tax and instigating proceedings against defaulters.

He had been implicated in the case by another employee, Nigel Abela, who is the alleged mastermind behind the whole scam, according to evidence given by Police Inspector Ivan Cilia, prosecuting.

There were six VAT Department employees, five go-betweens and 20 businessmen implicated in the scam, which ran into millions of euros.

In her judgment, Magistrate Doreen Clarke pointed out that the police had built their case solely on what Mr Abela said about Mr Caruana in a police statement. She dismissed this evidence as hearsay because Mr Abela did not confirm the information under oath when called to testify, invoking his right not to incriminate himself.

She also highlighted the fact that Mr Caruana had consistently denied his involvement and had given the police all the information they wanted about his role as a department employee in the cases investigated. Nothing illegal ever emerged.

Moreover, none of the businessmen who were supposed to have had the warrant of seizure lifted through Mr Caruana’s involvement were brought by the police to testify and neither did the Attorney General demand they be summoned as witnesses, the magistrate said.

Even an analysis of Mr Caruana’s assets failed to show anything untoward, the magistrate said, pointing out that there was no evidence to implicate the accused in the allegations against him. She therefore acquitted him.

The case surfaced in April last year after a businessman, who had been approached with an offer to bribe an official and save on his taxes, passed on this information to Finance Minister Tonio Fenech in December 2008.

Mr Abela allegedly pocketed over €190,000 over three years, often meeting clients after office hours, according to evidence in court. He initially asked for bribes to waive their fines but later allegedly devised more elaborate schemes that involved illegitimate refunds being issued to businesses that agreed to be part of the scam.

Lawyer Joe Giglio and Steve Tonna Lowell appeared for Mr Caruana.

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