Former Malta Gaming Authority (MGA) CEO Heathcliff Farrugia was quietly charged with corruption in January. The nation’s chief gaming regulator is accused of trading in influence with Yorgen Fenech, the casino owner and businessman suspected of ordering a hit on journalist Daphne Caruana Galizia.
The Times of Malta has discovered that the charges against Farrugia were hushed up to avoid tarnishing the reputation of the country’s gaming industry. Malta is one of the world’s foremost online gambling licensing hubs.
According to the Times, police uncovered incriminating conversations between Fenech and Farrugia when they examined Fenech’s phone during their investigation into Galizia’s murder. The crusading journalist was killed by a car bomb in 2017, possibly for alleging a government contract to build a power station had been corruptly awarded to Fenech’s company in 2014.
Police sources told the Times that Farrugia provided commercially sensitive information concerning rival casino operators to Fenech. They also discussed an anti-money laundering investigation that was being carried out on Fenech’s Portomaso Casino. It is not clear whether Farrugia is accused of accepting kickbacks for supplying this information.
Farrugia resigned from the MGA in October, which is around the time that Maltese police began their investigation, according to Times sources.
The Galizia affair has rocked Maltese politics. Fenech’s ties to the highest echelons of Malta’s government brought down the administration of then-Prime Minister Joseph Muscat. He was forced to resign in the wake of the casino owner’s arrest.
Three men, Alfred Degiorgio, George Degiorgio, and Vince Muscat have been charged with planting the bomb that killed Galizia, while Fenech is accused of masterminding the plot. A so-called middleman, Melvin Theuma, has been pardoned for testifying against the others.
Malta’s gaming sector is responsible for some 12 percent of its GDP and hosts some of the biggest brand names in the industry. But parts of it have been infiltrated by the Mafia. Last Wednesday, Italian authorities seized over €80 million ($95.8 million) in assets and announced restriction orders against 23 people in relation to the management of the website RaiseBet24.com.
Police allege the site had links to Sicily’s Cosa Nostra and had been targeting Italy illegally from servers based in Malta.
The MGA has been criticized for failing to sufficiently vet its licensees. In 2015, the red-faced regulator was forced to revoke the licenses of nine online gambling companies. These included BetUniq, whose CEO, Mario Gennaro, was described by Italian prosecutors as the “point man” for the Calabrian Mafia in Malta.