Famed Spanish showman planned to open bank in Malta to launder millions in drug money

Updated at 4:30pm with MFSA statement

By David Lindsay

Famed Spanish television showman, producer and entrepreneur José Luis Moreno planned to open up a bank in Malta through which he and his cohorts intended to launder millions of euros in drug money, according to dozens of reports appearing in the Spanish media over the last 24 hours.

Moreno stands accused of laundering some €50 million drug money that ended up in secret accounts in Switzerland, Panama and the Maldives. His organisation’s next step, according to Spanish investigators, was to open up a bank in Malta to facilitate the process and to cater to its growing money-laundering needs.

Multiple Spanish media outlets have quoted police sources as saying one of the organisation’s main projects was to open up a bank in Malta “designed for economic crime” through which it was to launder the proceeds of their drug smuggling operations.

Further details on the plans for the Maltese money-laundering bank, which Spanish investigators say were at an advanced stage, could be expected at a future stage of proceedings.  Spanish authorities have not released more information, due to the highly sensitive nature of the investigations and because it is believed that more arrests are still on the cards.

Moreno himself was arrested at his home outside of Madrid on Tuesday and stands accused of fraud, embezzlement, money laundering and other crimes.

The international criminal business network involving Moreno and his partners was allegedly diverting a portion of the profits from its criminal activities into its multiple businesses, most of which were linked to Moreno’s cinematographic and audiovisual businesses.

Operation Titella (‘Puppet’ in Catalan) – conducted jointly by the Civil Guard and the National Police – had had the organisation under investigation for two years. Over 700 merchants were involved in laundering money from drug trafficking to third parties by simulating non-existent business activity so as to justify the millions pouring in.

It was the arrest of a drug mule carrying €1.3 million in cash some two years ago that sparked off the operation and which led to Moreno’s arrest on Tuesday, and to the discovery of his plans to open a bank in Malta to specifically launder the ill-gotten gains of drug trafficking.

The mule had transported large amounts of cash in vehicles with double bottoms in and out of Spain on a regular basis.

Spanish investigators believe that Moreno had a network of intermediaries including bank managers, mainly in Barcelona, and that the name of the game was to raise funds for the organisation, in some cases, from cryptocurrency Initial Coin Offerings.

Once the organisation received the money, it was moved to other firms with the help of lawyers and a notary who also formed part of the network.  In so doing, investigators charge, the companies that had received the financing were decapitalised and their debts went into default.

It is posited that the organisation would have subsequently used the stolen funds to grant loans to third parties at high interest rates and to launder funds from drug trafficking. A private bank owned by the organisation and set up in Malta would presumably have greatly facilitated the scam.

Moreno’s arrest is part of an ongoing investigation against an international network of embezzlement and money laundering, which is being carried out under secrecy by the Central Unit for Economic and Fiscal Crime (UDEF) of the Higher Police Headquarters in collaboration with the Civil Guard of Barcelona.

MFSA statement

In a statement on Wednesday, the Malta Financial Services Authority (MFSA) confirmed that since January 2020, no banking applications have been formally submitted for consideration. Several other applicants also withdrew their applications after initial discussions with the authority.

“The MFSA’s authorisation decisions for banks are based on an in-depth assessment of the rationale for any application, the viability of the business model proposed, the risks it is exposed to including those arising from potential money laundering, and the ownership structure, which is expected to be simple and transparent,” the MFSA said.

The MFSA said due diligence checks were also carried out on individuals who apply to own or manage banks in Malta.

"The MFSA’s approach to banking authorisations is based on our risk appetite statement and shareholding policies for banks, through which a robust set of arrangements is implemented for ensuring that only banks which are sustainable and well-run are authorised to operate in the local market,” the Head of Banking Supervision at the MFSA, David Eacott said.