Comment: Greg Bufithis on Murder in Malta and Ediscovery – Part 2

The e-discovery industry has been in a race to adopt ever more sophisticated e-discovery tools, with advanced analytics technology that can take words, phrases and concepts and make connections across them to a level we have not seen before. But end users never seem to come close to using its full capability.
My colleague Jonathan Maas thinks its because in civil matters clients are never going to use the true analytical functions of that software because they are dogged by proportionality.  Only criminal and state investigations have the deep pockets required. Jonathan has a upcoming piece on this issue so I will let him elaborate.  But he and I are both agreed: the use of this technology outside its normal “neighborhood” is coming to pass. And many e-discovery technology companies are seizing the day.

I note this because a team of Italian anti-mafia investigators are now in Malta to assist in the investigation of the murder of Daphne Capuana Galizia as police explore potential links to international organized crime. Sources involved in the investigation have told me that organized crime links between Malta, Italy and Libya, among other countries, were being considered among “the main avenues of investigation” into last week’s car bombing.

We know that Daphne was looking into this international network of illegal activity and the Malta government’s “blind eye” to it. Investigators are trawling through thousands of posts uploaded on her popular blog in a bid to get a better idea of likely suspects, likely motives. This includes sifting through the many more thousands of comments left by readers, many of which were written using aliases, providing background information. And they are using e-discovery software to do it.

 In a subsequent post I am going to write in more detail how journalists and e-discovery vendors are collaborating and how these platforms are being modified to assist journalists with their analysis and to improve on their workflow efficiency. And in a further post, I will look at how some of these e-discovery techniques are being used in cyber security.

I received an enormous response from my first post and many of you have asked for more background on the “criminal and political cesspool” I described so herein some background –  and my thanks to several reporters at the Italian newspapers “L’Espresso” and “La Repubblica” for their notes and articles, as well as my media team who has been doing extensive research. Anyone I do mention below was named in court filings that were made public.

This story is really one made up of dozens of stories concerning the Mafia that many journalists have uncovered … and died for. Some of these stories include secret lists of Italians who set up companies in the former British colony. Malta has become the new Panama, set in the heart of the Mediterranean. For the Italian and Libyan and Russian criminal syndicates it is a sort of “like being home” tax haven, where tons of money from rackets, extortion and drug trafficking can be laundered. There is no need to go through customs or board planes. It takes just two hours by boat from Pozzallo or Portopalo di Capo Passero to reach its coasts. A briefcase stashed with cash, or often even just a wire transfer, and money launderers are set: millions of dirty euros can be reinvested in the legal economy.

As I noted in my first post, the crime syndicates set up night clubs, restaurants, gaming companies. Once laundered, that money can even yield a profit … and at very low taxes, or sometimes no tax at all. And more than anything else, it is a secure system, because Malta is a member country of the European Union, the currency of which is the euro. And no one checks on you if you are arriving from Italy. There is no need for reinventing stratagems: all you need is a not too zealous local authority.
I will summarise just two stories. The first was a stroke of good luck, really. A case of fate that would allow investigators to track down one treasure trove of Gomorra, the Italian Mafia-type crime syndicate. But then … well, you read the story:

Nicola Schiavone, the son of a notorious Gomorra boss, dropped his wallet on a street. The Carabinieri del Ros, an Italian enforcement branch, collected it, and found tucked between the banknotes and a laundry receipt a business card featuring the name of Bruno Tucci. Tucci is an Italian entrepreneur with a base in Malta. The investigators tapped Schiavone’s phone lines, listening to his calls and taping them. They conclude that Tucci might be one of the entrepreneurs through whom one significant Mafia clan intends to launder its money stockpile. So a full report is dispatched to the Malta authorities. The Italian plan: to follow the money, and stop the laundering operations before it even begins. But, alas, the Malta authorities delay an answer, and when it finally gets back to the Italian investigators it is incomplete. Someone in Malta has closed more than one eye on the origin of the money.

Then there is Haru Pharma Limited. A name like so many in the endless Maltese Registry of Companies. Haru Pharma is the perfect showcase to hide an embarrassing past: that of its owners, a major crime family, specializing in cocaine trafficking with the South American cartels. Journalists tracked down the ownership. The family was once a  star in the ill-famed “Anonima sequestri” (a journalistic term for a kidnapping ring), and later became drug traffickers with a net worth comparable to that of Mexican El Chapo Guzman’s cartel. The family comes originally from Sal Luca, a little village on the slopes of Aspromonte. This is where all Mafia bosses overseeing the European drug trafficking business reside.
As one journalist told me “they are a shrewd and quiet people with a strong sense for business. And they chose Malta to hide their wealth”. Haru Pharma is headquartered in Balzan, just a few miles away from the Malta capital, Valletta. Despite having been operating five years, the company never filed a balance sheet, so that made it impossible to get an idea of the assets and business operations of the company. Journalists did retrieve, however, other records. Its sole shareholder is Haru Pharma Holding Limited, incorporated in the Island of Saint Kitss and Nevis, a Caribbean tax paradise, the government of which is the British monarchy. Saint Kitss and Nevis guarantee an “absolute secrecy” on the identity of the company’s partners. But a little journalistic fortitude revealed that the head of the Maltese entity was the link between the anonymous Maltese shell company and the ‘Ndrangheta.
The ‘Ndràngheta is an organized crime group centered in Calabria, Italy. Despite not being as famous abroad as the Sicilian Mafia, and having been considered more rural than the Neapolitan Camorra and the Apulian Sacra Corona Unita, the ‘Ndrangheta became the most powerful crime syndicate in Italy in the late 1990s and early 2000s. While commonly tied together with the Sicilian Mafia, the ‘Ndrangheta operates independently from them, though there is contact between the two, due to the geographical proximity and shared culture and language between Calabria and Sicily. 
Journalists have poured over the Maltese Registry of Companies and determined many directors are linked to powerful criminal cartels.
The nature of this business changes, but not where the money originates. From pharmacy products we go to online gambling. The latter is an industry on which the Malta government is betting heavily by supporting it with a generous tax regime (to understate it, quite frankly). A major investigation on money laundering through these gambling facilities revealed companies, cash and real estate in Malta worth €2 billion.
The most powerful Italian criminal clans have one goal: to invest Mafia funds in online poker and betting sites. The industry, the Maltese Minister for Competitiveness Emmanuel Mallia said, is worth €1.2 billion, or 12% of Maltese national GDP. These figures translate into a consistent business for many people on the island, the first in line being accountants and lawyers, normally very well-known professionals and firms. Some earn €50,000 a month in fees. Case in point: Italian investigators determined that the “mark” concealing the Mafia clan in one operation was a fiduciary trust company headed by David Gonzi, a lawyer … and the son of the former Maltese prime minister, Lawrence Gonzi.
The Gonzi case shows what Malta has become in recent years: a European country in which lawyers and accountants have been serving any sort of client, even Mafiosi.
And then software entered the picture. Investigators tell me the criminal syndicates brought in Israeli technology experts to pump up slot machine operations by developing a software platform to manage online poker gaming to boost the profits the Mafia reaps from the slot machines and online poker businesses … and then used the computer technicians as fronts for the real owners of the companies. So no Mafiosi show up in the Maltese Registry of Companies.
It also extends into the building sector as Mafia controlled companies in Malta win bid after bid … an estimated total of a half a billion euros. Fronted by important Maltese law firms. In other words, a valued professional on a Mafia boss’ payroll. A repeat of the relationship I described above with the former Prime Minister’s son.
And through all these investigations a common tool for journalists: sophisticated e-discovery software, with advanced analytics technology that can take words, phrases and concepts and make connections.