Internal bank review raised red flags on Abela accounts
OPM denies ‘ridiculous assertions’
An internal Bank of Valletta review of Robert and Lydia Abela’s accounts raised red flags over €1 million in potentially “suspicious” transactions.
The review was carried out soon after Abela became prime minister in January 2020.
A spokesman for Abela claimed the review “raises ridiculous and maliciously false assertions, with the evident intended purpose for this report to be leaked and spun”.
Among the “suspicious” transactions highlighted in the review were three payments totalling €640,000 made by the then Labour MP to his wife between 2017 and 2019.
Questions have long been raised about the origins of the prime minister’s wealth, including three properties and a 50-foot yacht, all of which were bought without any bank loans.
BOV said in the review that during their time as practising lawyers, the Abelas used their accounts for business and personal transactions, without any degree of separation.
Certain expenses such as their daughter’s school fees were “channelled” through an account mainly used for client funds.
“This account behaviour could potentially have tax implications,” BOV observed.
Failure to separate business and personal transactions also makes it difficult for banks to understand the exact reason for certain payments.
‘Refused’ to shARe tAx RetuRns
Lydia Abela “refused” to give the bank copies of her tax returns, further fuelling the bank’s suspicions, the review says.
Lawyers and other self-employed people can reduce their taxable income by offsetting it against expense claims.
According to tax returns presented to parliament Abela said he incurred expenses of €369,000 on revenues of €754,000 generated from his legal practice between 2017 and 2019.
The expense claims reduced Abela’s taxable income from €754,000 to €385,077 over those three years.
Abela’s law firm has made hefty savings on office rental expenses, as since 2017, the law firm operated from a prime Valletta location despite having no legal title over the property, due to an expired government lease.
BOV noted how in October 2018, Abela deposited two cheques worth €328,000 that were not made out in his name but instead were payable to third parties.
The bank banned the deposit of cheques made out to third parties the following year, as an anti-money laundering measure.
Certain payments mentioned in the review indicate that the Abelas continued to profit from their legal practice after Robert Abela took up office.
The review said between October 2016 and January 2020, the Abelas issued €49,000 worth of cheques to lawyer Ian Borg, who worked at the prime minister’s law firm, which was formerly known as Abela Advocates.
BOV noted how after Abela became prime minister, “the transfer of funds has been reversed,” as Borg instead started issuing cheques to Lydia Abela.
Borg was placed on the public payroll just days after Abela took office, acting as an adviser to the prime minister.
Another Abela Advocates lawyer, Ryan Pace, was handed various government appointments, including deputy chairman of ARMS Limited and positions on various other government boards.
Contacted for comment, Borg did not address the reason for the payments to Lydia Abela.
He said “speculative and tenuous conclusions” were being reached based on “confidential information regarding banking transactions which you acquired irregularly”.
Borg categorically denied any wrongdoing linked to the payments to Abela, describing them as defamatory and prejudicial to his professional conduct and legal practice.
BOV’s review erroneously stated that the Ian Borg who paid Lydia Abela could be former Transport Minister Ian Borg.
‘All polItIcIAns scrutInIsed’
A BOV spokesperson declined to comment on individual cases when asked by Times of Malta whether the bank had reported its concerns about the Abelas to the FIAU, Malta’s anti-money laundering unit.
The spokesperson said the bank has robust measures in place to ensure it abides by its anti-money laundering and terrorism financing obligations.
“The bank is committed to upholding the integrity of the financial system and ensuring the safety and security of its customers’ assets.
“Under these standard applicable regulations, high-risk customers, including Politically Exposed Persons (PEPs), are subject to enhanced due diligence, which the bank conducts on all PEPs serviced by the bank.”
The spokesperson said BOV takes its anti-money laundering obligations seriously and remains vigilant in its efforts to combat financial crime.
“The control framework has established internal procedures that may lead to regulatory escalation and/or curtailment of service and/or termination of service in a manner as may be appropriate.
“The bank’s proactive approach to financial crime compliance reflects its commitment to maintaining the highest standards of integrity and transparency,” the spokesperson said.
‘unfounded AllegAtIons’
A spokesperson for the prime minister provided Times of Malta with a BOV document dated March 8, 2024, stating that his personal account is in good standing.
The spokesperson said any “allegations and subtle implications” on the income and bank transactions of the prime minister and his wife are manifestly unfounded and totally refuted.
“These are recycled and gratuitous assertions which tend to re-surface when an election draws near, and which ironically were mounted on a PN billboard in the 2022 election.
“It is common knowledge that the Prime Minister and his wife have worked, for several years, in a well-established legal office. They shared a common legal practice with other lawyers and have always derived their income from legitimate sources.
“All their taxable income and taxable deposits have been duly declared with the tax authorities in the respective and relevant forms – which forms do not solely relate to the income tax return form – and all tax thereon has been regularly paid,” the spokesperson said.
“I have never ceased to be a practising lawyer
The spokesperson said the bank accounts of the prime minister and his wife have been under the “normal scrutiny of all competent authorities, including the bank itself and which, unlike the case of other prominent politicians militating in the Opposition party, have been found in good order”.
On the payments that passed between Borg and Lydia Abela, the spokesperson denied this was in any way linked to Borg being given a retainer by the Prime Minister’s Office.
“Both practising lawyers have always acted correctly and professionally,” the spokesperson said. On the two cheques worth €328,000 deposited into Abela’s account while being made out to third parties, the spokesperson said these payments refer to “legal matters, including where Dr Abela was acting on behalf of his clients in court litigation”.
The spokesperson also dismissed concerns raised in the BOV review about €10,000 in payments that passed between Abela and a police officer between November 2018 and January 2019.
The spokesperson said these were salary payments due to the police officer for her work as a part-time legal secretary at Abela Advocates, during the period when she was exhausting her statutory leave and then after her retirement from the police corps.
In separate comments, Lydia Abela provided Times of Malta with a BOV document dated March 8, 2024, stating that her personal account is in good standing.
Abela said she has continuously met all the customer and due diligence requirements, and the bank has always been provided with all the necessary information and supporting documentation in relation to her account.
“May I also remind you that I have never ceased to be a practising lawyer for these last 20 years, and remain and will remain so, and I have always acted correctly and professionally,” Abela said.
In February, MEP candidate Arnold Cassola reported Abela to the Standards Commissioner over “discrepancies” in the prime minister’s asset declarations and property purchases.
Times of Malta reported in 2022 how Abela made €45,000 off a property deal with suspected kidnapper Christian Borg.