MALTA – THE ALTAR OF FRAUD

MALTA – THE ALTAR OF FRAUD

Malta has a long history of facilitating not just massive-scale pension fraud, but all types of financial fraud as well.  

Recent reports indicate a sharp increase in fraud cases and financial losses in the grubby little island of Malta.  A corrupt jurisdiction where neither the financial regulator nor the government attempts to tackle fraud committed and facilitated in Malta – despite compelling evidence from Malta’s own Arbiter.

A 2024 major fraud investigation by the European Public Prosecutor’s Office led to the charging of eleven suspects for fraud and corruption that caused €161 million worth of damage to the EU budget. CrimeMalta Observatory data shows a 900% increase in fraud cases from 245 in 2008 to 2,905 cases in 2023.  And yet Malta President Myriam Spiteri Debono has shown zero interest in combatting fraud or cleaning up Malta’s dirty financial services act.

Why is Malta the altar of fraud?

Pension fraud remains by far the biggest financial crime in Malta – especially as it is not included at all in any of the European Public Prosecutor’s or CrimeMalta’s statistics.  With billions of pounds in the hands of around ten leading QROPS providers, Malta facilitates a massive international fraud network involving secret commissions passing between unregulated, unscrupulous brokers and the Isle of Man insurance companies.  These include Utmost International, RL360 and Hansard.   

The Maltese QROPS providers (administrators and trustees) have for fifteen years worked hand in hand with the worst of the greedy and dishonest advisers, introducers, salesmen and brokers to ruin hundreds of thousands of lives – using unregulated insurance bonds and toxic investments.

There are many thousands of victims of pension and investment fraud whose life savings are stuck in Malta.  But their losses are also bounced around multiple jurisdictions.  Here is an example:

• Victim in Spain is “advised” by an insurance broker in Dubai (such as Holborn Assets, Globaleye, Guardian Wealth Management or DeVere) with no license to provide pension or investment advice to an EU resident.  
• Victim’s pension is transferred from the UK to Malta – into the hands of one of the various QROPS providers who encourage members to place their funds into an unregulated insurance bond in the Isle of Man, Ireland or the Cayman Islands
• The rogue “adviser” now has control of the victim’s money and invests them in toxic, high-commission assets from more rogue and complicit jurisdictions such as Guernsey, Switzerland, Germany, Cayman Islands and beyond.
• These toxic investments are provided by the insurance bond providers (Utmost, RL360 and Hansard) and pay further undisclosed commissions to the fraudsters.

Most pension-fraud victims’ losses occur in Malta and the Isle of Man or Ireland.  After deduction of the transfer, introduction and advice fees – as well as the QROPS set up costs – the remaining funds are placed in an insurance bond which pays the broker up to 8% hidden commission.  But this first commission is just the beginning – the fraudster is now in control of the victim’s portfolio (often with forged client signatures), and there are further unlimited commissions to be earned from destroying the funds with high-risk, unsuitable investments.

But scammers, greedy opportunists and fraudsters operate in all corners of the World – not just in the traditional fraud centres of Malta, Gibraltar and the Isle of Man.  Wherever there are clusters of British expats, there are hordes of unregulated predators posing as “financial advisers”, “wealth managers” or “pension consultants”.  And Malta just loves these conmen (they are mostly male) and the QROPS providers are more than happy to give them terms of business – and accept business from them.

For the vast majority of the Malta QROPS providers, it is purely a “numbers” game.  The more members they get, the more fees they receive.  So these providers welcome all members with open arms – irrespective of whether the transfers are in the interests of the members or not.  And the more toxic, high-risk/high-commission investments the Malta providers allow, the happier their clients (the dishonest advisers and brokers) are, and the more transfers they will recommend.  It is a vicious – and highly profitable – circle.

Most of the fraudsters (commission-hungry “advisers” and brokers) – whose crimes are incubated in Malta – don’t actually steal their victims’ money.  They just leverage the investors’ pensions and life savings for fat, hidden commissions.  However, one notable exception to this rule is convicted criminal Mark Donnelly of Brite Advisors.  He just helped himself to at least £219 million of his victims’ pensions and life savings.  A further £250,000 was spent by Donnelly on two Porsches for him and his wife.

All of the leading Malta QROPS providers have been fined for regulatory non-compliance and/or failing in their fiduciary duties to their members.  The complaints by victims of Malta QROPS are all set out on the Malta Arbiter’s website: https://financialarbiter.org.mt/oafs/decisions

The public needs to be aware of the Maltese QROPS providers who facilitate so much investment fraud and illegal hidden commission.  Existing victims need to transfer away from Malta as soon as possible, and future potential victims need to be warned about the very real dangers of allowing their life savings to be transferred to Malta in the first place. Also, Malta needs to be removed from the HMRC QROPS list altogether.

WHICH QROPS PROVIDERS MAKE MALTA THE ALTAR OF FRAUD?

Boal & Co – a relatively minor player on the Malta QROPS stage.  It claims to have £1 billion AUM (assets under management)  The firm’s “technical sales manager” is John Batty who previously had quite a legacy at Momentum Pensions.  It was Batty who set up the deals for Momentum with unregulated spivs – such as Continental Wealth Management – posing as advisers.  

Dominion Trustees – by far the most expensive QROPS provider in Malta.  But even paying £3,000 a year for a QROPS does not protect victims from investment fraud.  Three Dominion members reported to the Malta Arbiter that they had been introduced by convicted killer Darrin Brownlee-Jones of Holborn Assets to St James International (owned by Square Mile International) and advised to invest in the Privilege Wealth payday-loans loan note fraud.  One complaint lost £200,000 and another £250,000.  And Dominion did nothing to prevent these high-risk, unsuitable and fraudulent commission-laden investments.

Infinity International Pension Plan – this provider was subject to an administrative penalty by the Malta Financial Services Authority in 2019, relating to six pension schemes administered by ITC International Pensions Limited which has a couple of Arbiter complaints against it.

MC Trustees – owned and controlled by the infamous criminal and serial fraudster Mark Donnelly – was fined by the Malta regulator: https://international-adviser.com/malta-based-trust-company-fined/  It is alleged that MC Trustees is being sold to Richard Cayne of Relay Group (BVI) by Mark Donnelly.  Why would anyone buy anything from such a notorious criminal – especially an entity saturated with toxic assets?  Many of the victims in MC Trustees were given pension-transfer advice by Donnelly’s UK “advice” firm Basi & Basi which is now called Donre Advisory and is in liquidation.

Momentum Malta Retirement Trust – this is probably the worst of all the Malta QROPS providers.  It has more than 100 Arbiter complaints against it for failing in its fiduciary duties and allowing millions of pounds’ worth of investments in high-risk structured notes which were only suitable for professional investors.  More than 70 victims of the Continental Wealth fraud made Arbiter complaints against Momentum.  The complainants detailed the crippling losses resulting from irresponsible investments in high-risk (and high-commission) structured notes made by Jody Smart’s unregulated Spanish company.  Smart has now been convicted of fraud and swindling and faces a four-year prison sentence.  Momentum chairman Mark Gaywood reported that he had been so upset by the victims complaining about their investment losses that he had to go out and treat himself to a Porsche to cheer himself up.

Optimus Retirement Benefit Scheme – along with Integrated Capabilities – has three Arbiter complaints against it.  Along with STM, Optimus was a favourite accomplice of Aktiva Wealth Management (aka Square Mile International and Planet Pensions).  Optimus was happy to accommodate high-risk (high-commission) investments in fraudulent investments such as Blackmore Global and Symphony.  Optimus also allowed members’ pension funds to be placed – entirely unnecessarily – in an Investors Trust insurance bond in the Cayman Islands.  

Sovereign Pension Services – with 12 Arbiter complaints against it, Sovereign has allowed many members to be placed in unregulated insurance bonds and then invested in high-risk, inappropriate assets.  Sovereign makes no attempt to ensure that investment advisers or managers are qualified, regulated and experienced enough to advise retail investors.  And when the investment dealing instructions include investments which are clearly much too high risk, Sovereign makes no attempt to intervene as trustee (with a fiduciary duty to protect members from rogue advisers).

STM Malta Pension Services – with 18 Arbiter complaints against it, STM has a long history of allowing unregulated brokers and so-called advisers to place members in unregulated insurance bonds and then invest them in high-risk (and high-commission) assets which were entirely unsuitable for retail investors.  STM Malta also took over Harbour Pensions from Justin Caffrey who had done business with serial fraudsters Square Mile International (previously Aktiva Wealth Management and subsequently Planet Pensions) bought by Mark Donnelly for £650,000 which he stole from his Brite Advisors clients.

Malta – and the QROPS providers – have been complicit with the long-running fraud operated between insurance bond providers (such as Utmost, RL360, Hansard and Investors Trust) and the rogue, commission-hungry, unregulated brokers for at least fifteen years.  Without Malta’s cheerful and enthusiastic facilitation of billions of pounds’ worth of fraud, thousands of victims might have been spared the misery and ruin of losing their pensions.

Despite at least 12 ongoing EU investigations into fraud in Malta, with a total potential damage of about €161 million, no individuals have been brought to court in relation to these cases as of the latest report.

The Malta Financial Services Authority does nothing to shut these QROPS providers down and prosecute those responsible.  Meanwhile, the Maltese government stands idly by and ignores the widespread fraud which is rife throughout Malta.

There is no excuse for ignoring these massive financial crimes.  The Malta Arbiter complaints report in detail the QROPS providers’ repeated willingness to facilitate investment fraud.  But these complaints are only the tip of the iceberg as behind the very few who do manage to make Arbiter complaints, there are many thousands more who do not.  

Malta is only one of several rogue jurisdictions which harbour, foster and rejoice in greed and fraud.  It is important to highlight the dangers of these countries (and their flaccid governments, regulators and courts) which allow and even encourage financial crime:

Cayman Islands, Dubai, Gibraltar, Guernsey, Isle of Man, Jersey, Malta (and various others – INCLUDING THE UK!).

Shame on Malta.  Shame on the MFSA – the Malta financial services regulator. And shame on the Maltese government. Malta has the power to shut down much of this fraud – but chooses not to.