Malta could have had its first case of suspected funding of terrorism last year were it not for the fact that the suspicious transaction of a considerable sum of money into an inactive bank account happened to be a case of mistaken identity.

The case was mentioned in the Financial Intelligence Analysis Unit’s annual report for 2010 published yesterday. The unit is tasked to investigate suspicious transactions and collect intelligence that is then passed on to the police.

Antennae were raised when a considerable sum of money was transferred to an inactive bank account held in the name of a foreign national. According to the FIAU, the suspicion was strengthened when the money was claimed back by the remitting bank after checks were made on the names of the persons involved. There was close similarity between the surnames of the beneficiary and the remitter of funds and the surnames of two suspected terrorists.

The account was blocked until a police investigation revealed there was sufficient documentary evidence to substantiate the transaction and conclude this was a case of mistaken identity.

The unit said 23 reports were passed on to the police for further investigation. Of these, 19 came from suspicious transaction reports and another four were generated internally by the unit.

Credit institutions such as banks were responsible for 52 per cent of the suspicious transaction reports.

The unit said that for the first time last year there was a suspected “boiler-room scam” and another case involving false disclosures in relation to financial instruments.

It also recorded the first case of suspected money laundering arising from the proceeds of corruption.

One of the money laundering cases involved the use of Maltese companies within a large corporate structure, which were set up with the intention of concealing the identity of prominent foreigners involved in “a highly suspicious management buyout plan subject to a large-scale investigation in a foreign jurisdiction”.