07 Dec 2020
A politically-exposed Russian with alleged ties to the mafia has been flagged by the FIAU after using a membership-only credit card service company which former Economy Minister Chris Cardona joined after leaving politics.
Malta’s Financial Intelligence Analysis Unit this week announced that Insignia, a ‘luxury lifestyle management group’ has been fined €373,670 over a number of anti-money laundering compliance breaches.
The Valletta-based company caters for high-net-worth and Ultra-high-net-worth individuals, and had failed to raise a suspicious account with the authorities.
The FIAU said that an onsite inspection had shown how the firm had failed to file a suspicious transaction report about its Russian client despite red flags.
The inspection by the FIAU took place in 2019 when Cardona was still economy minister and had not yet joined Insignia.
Cardona stepped down from politics last year after he was left out of Cabinet by Prime Minister Robert Abela. He had been under pressure to bow out of politics after he was named in connection with the murder of Daphne Caruana Galizia. He denies any wrongdoing.
Insignia is a concierge and card service where membership is by invitation only. The company says it services customers “who represent extraordinary spending power”. “Clients include pre-eminent figures in business, politics, culture and sport,” the company says.
FIAU flags PEP with ties to the Russian mafia
Meanwhile, in a case uncovered by the FIAU, a politically-exposed person was rated as a high-risk client over media reports on his ties with the Russian mafia.
Insignia had obtained a source of wealth declaration form which only corroborated the information of the customer’s estimated earnings and assets, allegedly sourced from the client’s “entertainment businesses”.
The FIAU said this was simply not enough given the heightened risk posed by the customer and his political status.
“At a minimum the company should have, in addition to the source of wealth declaration, requested the customer to provide documentary evidence to substantiate the declared income and the source that generated the customer’s funds and wealth,” the FIAU said.
The FIAU went on to list a number of money laundering breaches by Insignia.
In one case, the company onboarded a client in April 2018 who was considered to be ‘medium risk’, and later assigned a ‘high’ risk rating in January 2019. The risk increase came as the customer was in 2012 convicted of £2 million illicit tickets’ fraud racket.
The customer had carried out transactions using Insignia cards to employees of theatre ticket agencies and payments to online ticket platforms. These same platforms were connected to the fraudulent activities the customer was accused of in 2012.
By Ivan Martin, The Times of Malta, 6 December 2020
Read more at The Times of Malta
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