Central Bank Governor-designate laundered portion of cash-bribes through third-party bank account

Central Bank deputy governor and governor-designate Alfred Mifsud laundered some of the cash he received from a businessman in 1997 and 1998, when he was chairman of Mid Med Bank, through an account held at the Bank of Valletta by a third party.

The businessman at the time represented an American software company which had won a tender from Mid Med Bank for a new banking software system that proved to be so disastrous that HSBC, which bought Mid Med in 1999, was forced to scrap it and enter into litigation with the supplier.

Each time the businessman brought a packet containing Lm50,000 in cash (€116,500) to Alfred Mifsud’s home – which was then in Balzan – Mifsud would first count it, then remove Lm10,000 (€23,300) and give it to a third party to deposit in a personal account which this third party held at the Bank of Valletta. The very day the cash was deposited, Mifsud would ask this third party to write out a cheque in his, Mifsud’s, name for the entire amount. Mifsud would then deposit the cheque in his own bank account.

It is not known how he disposed of the cash.

Before reporting this testimony, I checked with criminal defence lawyer Roberto Montalto whether it would expose the witness to the risk of self-incrimination and prosecution for complicity in money-laundering. Dr Montalto replied that the witness is safe because prosecution for money-laundering and complicity in money-laundering is time-barred after the passage of 15 years, under Article 688 (b), Chapter 9 of Malta’s Criminal Code. The period for investigation and prosecution therefore elapsed one and two years ago, and the third-party witness is safe to testify.

Alfred Mifsud, who will become governor of the Central Bank of Malta on 1 July.