Official ‘pocketed €93k’ in two years

A Transport Malta employee who masterminded a fraudulent scheme pocketed nearly €93,000 in cash by inflating the cost of road contracts, a court heard yesterday.

Architect Gordon Zammit allegedly exaggerated bills of quantities issued to the authority by a roadworks contractor so he and one of the company’s directors could split the difference. On one occasion, the cost was inflated by more than €60,000, the court was told.

Police Inspector Angleo Gafà gave details of how more than €503,000 were fraudulently siphoned off from the authority.

He was testifying in separate compilations of evidence against the 35-year-old architect, George Oliver Schembri, 49, from Birżebbuġa, a director of roadworks company Alfred Schembri and Sons Limited, and his accounts clerk, Donald Camilleri, 36, from Tarxien.

The three men are pleading not guilty to obtaining money or property on false pretences, defrauding Transport Malta, bribery, making false declarations and money laundering.

Mr Zammit alone is further charged with committing crimes he was duty-bound to prevent as a public official.

Inspector Gafà told Magistrate Claire Stafrace Zammit the architect received eight cash payments from the contractor between February 2010 and November last year, totalling €92,901.

He said Mr Schembri and Mr Camilleri admitted their involvement to the police and claimed Mr Zammit had approached them with the idea of this “fraudulent scheme”, which went on for about two years.

The police started investigating in August after they received confidential information about alleged corruption and fraud involving the contractor and some Transport Malta architects.

On February 18, armed with search and arrest warrants, the police simultaneously raided the company’s premises in Ħal Far and the Transport Malta Roads Directorate in Sta Venera. They arrested seven people in all.

The police were given 107 files with documents relating to roadworks contracted to the company since 2010. Of these, 29 files were Mr Zammit’s responsibility. The rest involved work by other TM architects.

An elaborate crosschecking exercise revealed how 24 of these 29 files contained discrepancies between the original bills issued by the contractor and the amount actually paid by Transport Malta.

The smallest discrepancy amounted to €1,196 while the largest – for the construction of Triq Barumbara in Żabbar – amounted to €63,909.

During a search at the architect’s home in Tower Road, Sliema, the police seized 254 documents including original company bills. On one of these documents the police found the inflated figure written in pencil.

Mr Gafà explained how, before splitting the difference, 18 per cent VAT and 35 per cent tax would be deducted. Mr Zammit used to be paid in cash while the rest of the money would go into the company’s accounts, he said. The last time Mr Zammit was paid in cash was November last year – €39,200.

On one of these documents the police found the inflated figure written in pencil

Inspector Gafà said that during investigations it emerged the company initially provided the cash through “pay self cheques” but this practice had to stop because HSBC, the company’s bank, complained.

It was at this point that Godfrey Cutajar, who owns a scrap metal company, was approached to issue fictitious invoices. The company paid him for these invoices – five in all – and he returned the money in cash.

(Mr Cutajar has admitted to money laundering charges and is currently awaiting judgement).

Mr Gafà said it resulted Mr Cutajar did not know why he was being asked to issue these false invoices and neither did he question it. He told the police he had got nothing out of it but had done it as a favour.

Architect Zammit released an eight-page statement to the police. When asked to explain the discrepancies in the bills, he said there was a reason but said he would only divulge this “at the appropriate time”. Asked to explain what the original bills were doing in his house, he said they were “rough paper”.

Mr Gafà testified in the presence of Mr Zammit’s parents and his distraught pregnant wife. His request for bail will be decided next week when the case continues.

During a separate compilation of evidence, Inspector Gafà said the company’s accounts clerk, Donald Camilleri, who spent most of the sitting crying, had been with the company for 17 years.

He had cooperated with the police and was not being accused of pocketing any money but of being part of the scheme.

During this sitting, Transport Malta architect Daniel Cordina, who had been arrested but released, opted not to testify so as not to incriminate himself.

At the end of the sitting, Magistrate Neville Camilleri granted Mr Schembri and Mr Camilleri bail against a deposit of €1,000 each and a personal guarantee of €5,000 each.

Police Inspector Fabian Fleri also prosecuted. Lawyers Kenneth Grima, Joe Giglio and Michael Sciriha appeared for the accused.