A magistrate this afternoon found that there was enough evidence for accountant and auditor Joe Sammut to be indicted over the charges of fraud and misappropriation.

The 58-year-old former Labour Party treasurer and candidate, from St Paul’s Bay, stands accused of helping Libyans set up companies in Malta in order to obtain residency permits using forged documents and fraudulent means.

He is also charged with misappropriation and non-observance of the due diligence expected of him in his professional capacity.

Joseph Sammut

As the compilation of evidence against Mr Sammut continued before Magistrate Doreen Clarke, Police Superintendent Paul Vassallo and Police Inspector Jonathan Ferris, prosecutors, took the witness stand to explain how their investigations had taken shape.

They both spoke about “entire volumes” of documents that they first seized from Mr Sammut’s office and then spent days, and sometimes nights, examining them.

Superintendent Vassallo, from the police Economic Crimes Unit, explained how the investigation began when the Citizenship and Expatriate Affairs Department gave the police a list of 62 companies which were registered by Mr Sammut and which all used the same 14 addresses.

Mr Vassallo said the police investigations revealed how none of these companies were operating from any of the said addresses.

He also explained how the police found that some of the companies circumvented the minimum share capital of €100,000 by providing invoices of goods purchased from Maltese companies.

At least three companies claimed that they purchased medicinals and another that it had purchased an entire container-load of tinned tuna.

But when the police confronted the companies over the invoices issued on their letterheads, the company owners said no such sales had been made.

Inspector Ferris told the court that when the police first went to Mr Sammut’s office for a search, Mr Sammut accused the officers of “hindering foreign direct investment in Malta”.  Mr Ferris said he had told Mr Sammut that none of the companies being investigated were operating from Malta so there was no investment at all.

Mr Ferris said the prosecution believes that Mr Sammut’s company failed to carry out a proper due diligence before companies were registered in Malta. He said Mr Sammut had told him that most of the companies could not be verified due to the situation in Libya. But Mr Sammut also told him that since people knew each other in Libya, he was using his contacts in Libya there to ask about applicants.

The court heard how Mr Sammut had two people who used to introduce people who were, according to them, eligible to set up a firm in Malta.

In court, Mr Sammut’s employees – Eva Calleja, Wendy Zammit and Charlotte Micallef – all refused to testify after they were warned by Magistrate Clarke that they had the right to remain silent as criminal action could be taken against them.

Even the Libyan director of a Maltese-registered company, Nureddin Mohammed Shaibi, 45, who lives in Gżira, refused to testify for the same reason.

The defence asked Mr Shaibi whether he was prepared to answer their questions but he refused.

Mr Shaibi was last week handed a suspended sentence after admitting to having presented false documents when importing food items from Libya.

The case continues on October 9.

Senior lawyer Michael Schiriha and lawyers Franco Galea, Simon Micallef Stafrace and Martin Fenech appeared for Mr Sammut.