Maltese company involved in €600m mafia tax evasion scam

A Maltese company was identified as being involved in a tax evasion scam worth some €600 million, an investigation by the Italian Guardia di Finanza has revealed.

The company and the 23 individuals investigated are believed to be linked to the Santapaola-Ercolano clan, which has been associated with Malta in previous cases.

The investigation focused on the period between 2013 and 2016. After auditing a Catania-based company, the Guardia di Finanza found a number of violations and irregularities. This led them to the existence of the Malta-based company.

This entity was involved in “betting collection activities and offering a wide range of online products including sports betting, live poker, virtual games, games of skill” and other online gambling services “without authorisation”.

The report notes that the Maltese company, which was not named, was managed by two individuals from Catania and all activity related to it was taking place in Italy. Huge profits were then funnelled into the Maltese company before being laundered into the acquisition of property and land, and on to further companies in Italy and Germany.

This company received undeclared revenue of some €570 million over three tax years.

The two individuals that owned the Maltese company were already apprehended last March.

It was found that criminals had set up a betting site called RaiseBet24.com which was unlicensed in Italy, but had servers in Malta. Over-the-counter bets in Italy were then solicited by organised crime gangs and the money was funnelled into other companies in Italy and Germany also involved in the most recent investigation. The scam was believed to be worth some €62 million.

The new revelations from the Guardia di Finanza show that the Maltese company also received funds and was complicit in tax evasion. 

The Organised Crime and Corruption Reporting Project (OCCRP) reported at the time that the Italian Mafia often uses the Maltese online gambling sector as a “cash cow” for criminals. Often, criminals will make deals with legitimate sites that have set up shop in Malta because of its “favourable” fiscal regime.

A report published by the Dipartimento Investigativo Antimafia (DIA)in Italy in 2018 said that Malta is a popular location for financial crime because of its “privileged fiscal system” and “rapid process to set up a company”. Its physical proximity to Italy and Sicily was another benefit they observed

In 2016, DIA noted that the Santapaola-Ercolano clan was involved in illegal gambling, fuel smuggling and weapon trafficking, all including links to Malta.

Then, in 2017, the Italian Carabinieri arrested 30 people linked to Santapaola-Ercolano as a part of Operation Beta. They were arrested in connection with money laundering and illegal gambling operations within and from Malta.

But it’s not just the Santapoaloa-Ercolano clan that uses Malta for illicit purposes.

In 2015, the Malta Gaming Authority said that 10 in 200 gambling licence holders were Italian. Over the years, a number of licences have been revoked after links to various clans were revealed.

Betuniq had their licence revoked along with eight others in that year alone, for ties to organised crime.

In 2017, 31 individuals including Benedetto Bacci were arrested for allegedly entering into an agreement with the Cosa Nostra in Palermo. Bacci had been laundering money from illegal gambling through a Maltese company called Phoenix International Ltd.

A year later, Italian authorities seized €20 million in assets from a group who allegedly managed an illegal online gambling site for ‘Ndrangheta. Again, a Maltese company was at the centre of the crime and it was seized along with Malta license holder Centurionbet.