Former Malta Gaming Regulator CEO Charged with Corruption

March 9th, 2021 5.00pm

The Times of Malta has sent shock waves through the country’s gambling industry after revealing that the Malta Gaming Authority’s former CEO was quietly charged with corruption earlier this year.

Heathcliff Farrugia is suspected of trading in influence, but more importantly, he was linked to Yorgen Fenech, a local casino mogul. Fenech is suspected of being the man behind the murder of Daphne Caruana Galizia, a journalist assassinated back in 2017.

A Small Nation with Huge Problems

According to the media reports, Farrugia is believed to have been providing Fenech with information about the casino industry competition.

But the formal charges against the former head of the country’s gambling regulator were hushed up. The Times of Malta stated this had been done to preserve Malta’s reputation in the online gambling industry since the island represents one of the most important licensing hubs in the world.

The Times’ report says the incriminating conversations between Farrugia and Fenech were discovered in the early stages of the investigation into the murder of Caruana Galizia. The journalist made the headlines after revealing the government corruptly awarded Fenech’s company a contract to build a power station in 2014.

After numerous threats, Caruana Galizia was killed three years later in a car bomb explosion.

According to the Times’ sources in the police, Farrugia was the one to provide Fenech confidential information about his competitors in the market. The two talked about the anti-money laundering investigation the authorities carried out at Portomaso Casino, a gambling venue owned by Fenech.

At this moment, it is not clear whether charges against Farrugia include accepting a bribe for delivering this information.

A Journalist Killed for Revealing Corruption

Farrugia left his position in October, which coincides with the start of the investigation against Fenech.

The corruption scandal revealed by Caruana Galizia was a real shock for the Maltese political scene. It showed the connections between Fenech and the country’s government officials and even led to the downfall of Prime Minister Joseph Muscat’s administration. Muscat was forced to resign after Fenech ended up behind bars.

Three men were later arrested for the murder of Caruana Galizia. Alfred Degiorgio, George Degiorgio, and Vince Muscat have been charged with planting the car bomb that killed the journalists. At the same time, Fenech is suspected of being the mastermind of the whole operation. The fourth man, Melvin Theuma, who acted as a middleman in the plot, testified against the others and was later pardoned.

A Lucrative Industry Infiltrated by the Mafia

The gaming sector is essential for Malta, accounting for around 12% of the country’s GDP. The small island nation is home to some of the leading names in the industry. However, the biggest problem is that the Mafia has a significant presence within this lucrative segment. Last week, Italian authorities completed their investigation relating to the management of one Maltese-based gambling website. As a result, the investigators seized around £69 million in assets and issued restriction orders against 23 individuals connected to the said website.

Police claim the illegally-operated website was run by the Mafia – or Sicily’s Cosa Nostra, to be more precise. It was based in Malta but targeted gamblers in Italy.

Malta’s regulatory body has been often criticised for not thoroughly checking operators before awarding them a license. Back in 2015, the MGA was forced to cancel nine online gambling licenses. One of the operators whose license was revoked was BetUniq. Its Chief Executive Officer, Mario Gennaro, was revealed to have strong ties to the Calabrian Mafia, serving as its point man in Malta.

As investigation against former government officials continues, we’re sure more interesting information will be revealed in the coming period.

The gambling sector is very important for the small island nation.