TOP STORY: John Dalli linked to massive $30m US Ponzi scheme

Back in January 2008, The Malta Independent on Sunday broke the news of how a massive Ponzi scheme was being operated through three companies registered in Malta, and how US investors had been defrauded of around $30 million.

That money was supposed to have been invested in Bermuda, but somehow, just over $9 million of it ended up in Malta, passing through bank accounts held by Exodus Equities Ltd, Exodus Capital Ltd and Soleil Group Holdings Ltd. All three companies were owned by Keith Roberts Sampson Bristol, a citizen of The Philippines, who lived in Malta and operated out of an office in Floriana.

The Sunday the story was published, editor Noel Grima got an angry early-morning telephone call from John Dalli, who was furious that the article had been published, and that The Malta Independent on Sunday had investigated the matter and written about it (the journalist was David Lindsay, who now edits the newspaper).

Dalli accused the newspaper of “writing things without checking them”, ranted and raved, but failed to explain exactly why he was so involved and why he was on the phone first thing in the morning to defend Keith Roberts Sampson Bristol and his Ponzi scheme.

Dalli was not a cabinet minister at the time but just a backbencher working to build up his private business. The prime minister had made him resign from his cabinet post as Minister of Foreign Affairs, some three years earlier, after he was found to have been buying air tickets for ministerial travel by direct order from his own travel agency, which was fronted by his daughter Claire Gauci Borda.

Unfortunately, Noel Grima did not write about what happened next until almost four years later, in October 2012, when John Dalli was forced to resign once more – this time from his post as European Commissioner. This is what he wrote:

At around 9am on a Sunday morning in January 2008, I got a phone call from an irate Mr Dalli regarding a story we carried that day (David Lindsay and I had found the story and David wrote it). It regarded some $20 million* of the savings of many US persons whose funds, which were supposed to be invested in the Bermudas, somehow ended up in Malta.

That phone call was the first intimation Mr Dalli was somehow involved. He argued we were doing a lot of harm because we ‘wrote things without checking them.’

An hour later, I received a call from an equally irate American guy, who was directly implicated in the company we mentioned**. Then he passed on the phone to another person, who, to my utter surprise turned out to be Labour MP Noel Farrugia.

Now that Sunday was the day Alfred Sant returned to his party after his serious illness and the party had organised a big do at CNL. Yet Mr Farrugia was not there, but at a Floriana office***.

They insisted we go in for a meeting the next day but I had some problems with my car and Mr Farrugia himself came for me at Zebbiegħ, where we were living then.

When we got to Floriana, we found a number of canvassers lounging outside***, and inside we found Mr Dalli sitting at one end of a big table and Mr Farrugia at the other. The American guy was in the middle and next to him was a lawyer from Munich who treated us to a lecture in ethics in journalism, as he saw them.

Court action regarding this issue is still ongoing. The money has still, to my knowledge, not been recovered and there is much more to this.

Anyway, I was flabbergasted, and while I have never written about this till today, I made sure that people who matter got to know about this unlikely and suspicious combination, from people close to the prime minister, to US Ambassador Molly Bordonaro, to the high echelons of the Labour Party – although I did not speak to Joe Muscat, I know from comments he made to a third party, that he knew all about it.

*The sum was later found to be much higher – $30 million, around $10 million of which was transferred to Malta.

**Keith Roberts Sampson Bristol

***Roberts Sampson Bristol’s office

****There was a general election around six weeks later, and both Noel Farrugia and John Dalli were campaigning to be elected, the first on the Labour ticket and the second on the Nationalist Party’s.

——

Keith Roberts Sampson Bristol’s companies then hit The Malta Independent on Sunday with a libel suit for damages, which is probably why Noel Grima thought it best not to write about Dalli’s involvement in this Ponzi scheme at the time and risk another one. But the companies lost their suit in a judgement given in October 2013.

That they would lose their suit was a given, because meanwhile, in September 2010, US-court-appointed receivers had instructed lawyers in Malta to sue Exodus Capital, Exodus Equity and Soleil Group Holdings in an attempt at recouping whatever they could of the $9.1 million that had been scammed off US investors and put into Maltese bank accounts.

At that point, legal action had been going on in the United States for more than two years. The Malta Independent on Sunday had written about it when it began, which means that when John Dalli rang the newspaper to fight on Roberts Sampson Bristol’s behalf and then was present at his office when the editor turned up for that meeting, he knew that action had already begun in the United States after investors informed the authorities that their millions had gone missing.

Had he been representing Roberts Sampson Bristol in good faith, he would have distanced himself on finding out about that, but instead he dug himself in deeper.

This morning I rang Noel Grima to see whether he had asked John Dalli why he was ringing him on behalf of a fraudster they had written about, and why he was sitting there in Roberts Sampson Bristol’s office when he turned up for that meeting.

“I didn’t have to ask,” Grima told me. “It was as plain as day that he was involved, and that he had a vested interest in the operation. There is no other reason why he would have rung and spoken to me that way, and no other reason why he would have been in Roberts Sampson Bristol’s office on a Sunday morning, with a lawyer and Roberts Sampson Bristol, ready to accuse our newspaper of all kinds of things. I had given Dalli the benefit of the doubt until then, but at that moment I realized what he is and I was shocked.”

When the case against the companies began in Malta, a garnishee order on the bank accounts of the three companies found just €59,504 in all – a far cry from the $9.1 million they were looking for. The US receivers published an interim report in which they said that Keith Roberts Sampson Bristol “used that US$8.8 million as a personal bank account…The Receiver has retrieved documents showing how KRSB spent that money. None of the expenditures relates to any legitimate investment.”

He was found to have spent the missing US$8.8 million on his personal household bills, and to have transferred funds to “service companies, organisations and individuals in Malta”.

The money that ended up in Malta was just under a third of the total US$30 million which the US courts calculated were defrauded from US investors. The money was meant to have gone into an apparently legitimate investment called the Exodus Platinum Fund, a mutual fund registered in Bermuda, but was instead transferred to bank accounts in Malta, Switzerland and Andorra, which were controlled by the Maltese-registered company Exodus Equities Ltd. The Exodus Platinum Fund never actually operated.