Alleged $50 million fraudster released by Maltese courts owns shares in Malta-based companies

Frank Rafaraci, who allegedly defrauded the US Navy of around $50 million and yet walked out of a Maltese courtroom twice due to a series of legal technicalities, owns a company registered in Malta called Turner Holdings Ltd and is also CEO and listed beneficial owner of another, Multinational Logistic Services Ltd (MLS) – the company cited in the alleged crime, The Shift has learned.

Turner Holdings Ltd, registered in Malta on 20 February 2017, lists Frank and Brunella Rafaraci as the two shareholders of the company and an individual named Hasan Teoman as the sole director. A US-based, Malta-born lawyer, Anton Micallef, appears as secretary, director or shareholder of most of the numerous companies in which Frank Rafaraci is involved. Micallef is a lawyer at Advocates Micallef and Co.

MLS – Multinational Logistic Services Ltd is a ‘ship husbandry’ company providing services to ships moored in ports, registered in Malta in 2004. The majority shareholder of MLS is AVMT (NMS) Ltd, a nominee company, which is in turn solely owned by Almond Consultancy, a firm owned entirely by Micallef. Micallef also appears as the only director for the other shareholding company within MLS, Seri Ltd.

A US Navy procurement scandal with links to Malta

In 2013, a New York Times report outed Multinational Logistic Services Ltd (MLS) as one of three US Navy suppliers embroiled in a procurement scandal. One of its executives, Akbar Khan, was forced out on paid leave pending further federal investigation into his conduct when he still worked at a rival company on reports of over-billing.

The Criminal Complaint which was filed by US Department of Defence special agent Cordell DeLaPena and led to a local arrest warrant on Rafaraci states that “from at least in or around 2011 to in or around 2021, Rafaraci, and others, known and unknown, knowingly and intentionally conspired and agreed to bribe public officials to benefit Rafaraci’s company”.

Rafaraci has at least three unnamed and unindicted co-conspirators which are mentioned in DeLaPena’s report: the Chairman of MLS’ board of directors, a Navy official who solicited bribes from Rafaraci to help him defraud the US Navy in Bahrain by approving over-inflated invoices, and MLS’ chief financial officer, a citizen or resident of Malta. In June of this year, the Navy official turned state’s evidence on the fraud operation in the hopes of obtaining clemency.

Essentially, the bulk of the fraud allegedly carried out by Rafaraci’s operation consisted of over-billing the US Navy for services. In one, specific, example, MLS was engaged to provide husbanding services to the USS Carl Vinson during a port call in Manama, Bahrain in January 2015.

MLS submitted invoices from the Manama port authority to the U.S. Navy totaling $231,114.43. In reality, MLS paid only $12,686.40 to the Manama port authority. In turn, MLS would allegedly pay bribes or kickbacks to the US Navy official in the form of loans. MLS obtained over $100 million in Navy contracts in Bahrain alone over the course of just nine years, many of which allegedly involved over-invoicing using this method.

According to DeLaPena’s investigation, MLS’ primary bank account in Malta is used mainly to funnel and launder fraudulent money that’s then transferred to other shell companies, mainly in the United Arab Emirates where Rafaraci resides. To do this, they were using a company known as Sinfonia, a shell entity in the UAE, using code words and specific terms to delineate volumes and even providing backdated invoices when necessary.

Sinfonia was allegedly almost exclusively capitalised by money from MLS’ corporate accounts. Eventually, when AML officers from both local and Emirati financial authorities started asking too many questions, MLS ditched Sinfonia and started using another shell company known as Rudis Ltd, according to the Criminal Complaint.

According to news reports, Rafaraci was arrested and arraigned in Malta on Monday in a joint operation coordinated by US and Maltese authorities. US prosecutors seeking to extradite Rafaraci for allegedly defrauding the US Navy were however frustrated after Rafaraci was twice released by the court.

On 25 September, a local arrest warrant was issued for Rafaraci after US authorities informed Malta’s police force about Rafaraci’s plans to travel to Malta the following day. Fielding a team of four high profile lawyers, Rafaraci avoided being kept in custody after his legal team successfully argued against both his first arrest and the prosecution’s bid for his re-arrest.

However, while the request for extradition hearing is now set for 4 October, prosecuting authorities in Malta face the risk of Rafaraci leaving the island, as his obvious overseas connections could pose a high risk for absconding.

Other links abroad

Besides Turner Holdings and Multinational Logistic Services, Rafaraci is linked to another Maltese company through his association with Teoman, the sole director of Turner Holdings. Vodina Holdings Ltd, which is registered on the same Gżira address as Turner Holdings, lists Teoman as sole director and shareholder.

Based on The Shift’s research, Rafaraci is also involved in at least two other companies in the UK which form part of the various subsidiary companies falling under the brand of Mission Critical Logistics, a large military services group of companies that provides logistical support for marine, terrestrial and aviation missions.

Rafaraci is a 50% shareholder in MLS Aviation Ltd and MLS (Overseas) Ltd, two of the MLS Group’s business arms, with Micallef serving as secretary in both companies.

Rafaraci’s network of companies also extends to the US, where he is involved in at least two companies known as Sunward Tours Inc and MLusa Corp, with Micallef also serving as secretary in the latter. According to Dun & Bradstreet, MLusa Corp’s data indicates that the company generates around $723,139 in annual revenue, while Sunward Tours Inc generates around $1.2 million.