Illegal lotto’s annual €10 million turnover has to be cleaned somehow. In property construction
An illegal national lotto once run in the main by criminal Melvin Theuma today rakes in millions in cash each year for its organisers and their construction business associates
An illegal lottery that is run nationwide and was first flagged during the arrest of the Caruana Galizia assassination middleman Melvin Theuma, is believed to be creaming off 30% of the legitimate market. That’s at least €10 million in turnover in the illegal lotto.
The players behind this illegal ‘national’ lottery have inherited the operation, or at least part of it, from Theuma himself, who turned State’s evidence after he was granted a presidential pardon to testify against the alleged mastermind in the assassination of journalist Daphne Caruana Galizia, back in November 2019.
Theuma had in fact been under the eye of financial crime investigators that same year, when a raid on his property found – according to some press reports – over €2 million in cash stashed away.
Key background to this story is that in a magisterial inquest compiled by Magistrate Gabriella Vella, Theuma’s partner Charmaine Zammit, her daughter Shianne Zammit and her partner Ryan Farrugia, of Farbros Construction, were referred for charges on money laundering. This is a spillover from the investigation on Theuma, who apart from running a lucrative taxi stand at the Portomaso complex, also acted as a personal go-for to alleged mastermind Yorgen Fenech, and naturally a middleman for the criminal fraternity (he was even granted a presidential pardon for what could have been an indirect role in the heist of the HSBC bank in 2010 when he put up one of his properties as a safehouse for the men involved in the shoot-out with police).
Back to Malta’s “parallel lotto”, which like many ‘disruptive’ black market activities, also has its genius.
First of all, it comes complete with tickets, and pundits stand a chance of winning major cash, sometimes higher payouts than the national lottery itself. How do its organisers finance it, you might ask?
Well, just like the millions Theuma is believed to have amassed, so have these operators their own cash flow, and property holdings; apart from the fact that over the last three decades, the law of averages works out in the favour of the lottery organiser, right? You have regular players ‘losing’ money week in, week out… your float is now substantial enough to withstand a big payout.
Secondly, the illegal lotto is pegged to the national one, with players placing bets on a string of numbers and waiting for the national lotto draw to be announced at the end of every week. The illegal lotto uses a trustworthy, bona fide lottery draw.
Third, the illegal runners of the lottery also know (although this is transparently declared in the statistics published by the National Lottery concessionaires) which numbers tend to be frequent winners… so they take out a sort of insurance by playing the numbers themselves in the legal national lotto! It is especially important in the case of regular customers who are playing the same numbers every week (it would be just like they have an open tab at the bar), so they smoothen out the risk from the probability that they might one day strike the jackpot with their lucky numbers.
Sources linked to financial crimes investigation believe these million-euro turnover are not unrealistic. “We estimate that 30% of well over €30 million that gets played in the legitimate lottery market every year, could be played in the illegal lotto,” one source told MaltaToday.
The major operators of this illegal lotto are a few, but they each have a corner of the island or ‘districts’ that fall under their control, with their runners taking the numbers in the village bars and każini.
Crucially, and this makes sense when you see the Theuma charges, such enormous amounts of cash need to be cleaned somehow. Solution? The world of construction or property speculation:
“They all have legitimate businesses – they are well known in town, they can be respectable types who get snapped with local politicos in the village festa. But construction is important to them because it is a world where cash transactions are constantly used. And with the volumes of cash they collect on a monthly basis... well it has to be cleaned somehow, or in some cases given to charity, if it enhances their respectability,” the same sources said.
And while the property transactions concerning the suspects in Malta’s parallel lotto are under the eye of financial investigators, but the lotto itself tends to be ignored by local police. “The parallel lotto is a fact of life in the village bars where it is played – regulars have a tab with the runners, where they always play the same numbers.”
A veteran social worker also spoke of clients with regular gambling patterns on both the legitimate, and illegal lottery. “In certain village bars, people play their numbers in both the illegal and legitimate lotto... some have accumulated debts with the runners, and hope they will pay off their loans, naturally at usurious interest, when they finally win the big prize.”