How diesel smugglers got away with it for years

June 4, 2018

Diesel smuggling was a major headache for the Maltese authorities, until they decided to push them out of the island’s jurisdiction and off law enforcement’s to-do list.

The Sunday Times of Malta met with a number of government officials, investigators and political operators with an intimate knowledge of the Malta-Libya diesel smuggling racket, with one question: “How did this crime go unpunished for so long?”

In a series of interviews, sources detailed how back in 2014 the government, police and security services had agreed that getting smugglers out of Malta’s jurisdiction was the simplest way to “deal with the problem”.

“A direction was agreed upon to close the loopholes and back channels ‘allowing’ smuggling to occur in Maltese waters. Once this was done, they moved their operations just a few kilometres further out to sea and this was seen as favourable to us,” one senior government source said.

The move was not seen as favourable, however, by the international community – most notably, the Italian government, the source added.

“There was disappointment by our neighbours that we were not doing more – this was communicated to us through unofficial channels,” another source said.

Meanwhile, one AFM source, who at one point was involved in patrolling Maltese waters, said the smugglers appeared to know just how to get away with the crime under the authorities’ noses.

“On one patrol I remember we knew there were some boats that were probably selling diesel. But they were just out of our jurisdiction. We also had clear direction to limit ourselves to matters in our territorial waters,” the source said.

However, this does not mean the smuggling was limited to international waters.

Last month, the Investigative Report Project Italy (IRPI) and the Times of Malta reported on the criminal activity as part of the Daphne Project.

The reports found how the island was at the centre of a well-coordinated multimillion fuel-smuggling operation, with stolen Libyan fuel traded easily in territorial waters and through established storage facilities inside the Grand Harbour and Birżebbuġa. The criminal operation evolved into a large criminal organisation coordinated by Maltese, Libyan and Sicilian businessmen close to the mafia.

Don’t for a second think that this crime has stopped – because it hasn’t, we are talking about huge sums of money, millions upon millions of euros

The Sunday Times of Malta has learnt that smugglers had long been on the Malta Security Services (MSS) radar – since the fall of the Gaddafi regime.

“They were monitored – their movements, and in some cases their conversations – as part of a national security risk assessment,” a former MSS official told this newspaper in a confidential meeting in a car parked on a country road.­

He went on to detail how in 2014, information gathered by the MSS had been unofficially passed on to the police in the form of intelligence – however, he was quick to add that such intelligence is not admissible in court as evidence and so the police would have had to start investigating the matter from scratch.

Asked why action was never taken, police sources said there were several reasons.

“Oh come on – you know it isn’t as straightforward as that, there are pressures, there are other priorities, and keep in mind that these are criminals who go the distance. You don’t mess around with these people unless you really mean business,” the former official said when asked why the gang was never arrested.

He went on to explain how, although one alleged gang – that run by Mr Debono – had been arrested by Italian police, another had quickly filled its shoes.

“Don’t for a second think that this crime has stopped – because it hasn’t; we are talking about huge sums of money, millions upon millions of euros,” the source said.

Escaping from the money-laundering investigators

Perhaps the best bit of luck the island’s major fuel smugglers got was their close shave with a money-laundering investigation.

Sources in the Financial Intelligence Analysis Unit told The Sunday Times of Malta that back in 2015 a series of investigations had been opened into suspected fuel smugglers and their possible connections to the fuel importation and bunkering business, and another of other suspected white collar criminals on the island.

This might have spelled the end for the smugglers had the investigation not hit a few snags.

Sources said the investigation was eventually “abandoned”, pointing to a lack of understanding of the racket and “other pressing matters” that had required a refocusing of the FIAU’s resources around 2015 and 2016.

“The fuel-smuggling racket is not such a straightforward one. Investigating it requires a deep understanding of how the industry works – a lot of what happens is not actually illegal. There simply was not that knowhow in the unit at the time,” the FIAU source said.

Giving some context, the source said that the buying and selling of Libyan fuel out at sea had been going on for several years, and distinguishing the illegal smuggling from legitimate trade was not so straightforward.

“There is nothing wrong with it in principle. The illegality comes in taking fuel that is stolen and falsifying documents to make it look legitimate. As you can imagine, that is a complex thing to unravel. Especially if State authorities could have been legitimising the fuel in question without even realising it.”

Smugglers as informants

Police investigators suggested to The Sunday Times of Malta that some smugglers had at a point enjoyed a relationship with some investigators by trading valuable information.

Smugglers, they said, had long been tipping off the police about the activities of other rackets – including that of their competitors.

This, investigators said, was common practice by gangs involved in a spectrum of criminal activities on the island.

Keep in mind that these are criminals who go the distance. You don’t mess around with these people unless you really mean business

“They would provide information on the activities of their competitors. It suits them to have the competition hampered and is useful for police too,” one investigator said.

Comparing the investigative methods to those used to combat drug trafficking, police sources said investigators had “established channels of communication” with some who operated in the smuggling world.

This complex rat race at one point saw two rival gangs of smugglers join forces after they realised police were receiving information on their activities from a third smuggler, the sources said.

But did the police ever really make any arrests on the basis of this information sharing? Investigators said arrests happened but they were “few and far between”.

They pointed to one particular crackdown in 2013, when the police and armed forces officials seized a fishing boat with more than €500,000 on board. At the time, the captain had claimed the money was meant to pay fishermen’s wages, and he was charged in court with moving large sums of undeclared cash.

The sources said the arrest “could have been” the result of a tip-off from a competitor and the money was believed to have been meant to pay for a shipment of smuggled fuel.

timesofmalta