German businessman acquitted of fraud and embezzlement charges after complaint withdrawn

A court has acquitted a German businessman, who was charged with embezzlement and fraud in 2015, on the basis that the criminal complaint against him was withdrawn after the defendant paid the sum owed.

Arne Wolfgang Schmidt, who runs a travel agency in Malta, had protested his innocence when he was arrested by police inspectors Matthew Vella and Christabel Chetcuti for fraud and embezzlement, insisting the alleged victim was the person who should be in the dock.

During his arraignment, Schmidt’s attorney Arthur Azzopardi told the court that Paul Zammit, the man who filed the criminal complaint that led to the lawsuit against his client, was the fraudster. Zammit had filed a criminal complaint against Schmidt, claiming to have paid €75,000 to the German as part of a business deal.

The accused insisted that no money had ever changed hands.

Magistrate Josette Demicoli had heard police inspectors from the prosecution explain how the then Economic Crime Unit had been informed by Paul Zammit, a pensioner, that he had met the accused in May 2015 on a flight from Frankfurt to Malta. They exchanged contact details and arranged several meetings and that Schmidt had even spent about four weeks at Zammit’s residence at one point.

Zammit told police he gave Schmidt gold pellets twice along with gold coins, along with a receipt showing the pellets were valued at €25,310.09. Zammit also initially told police that Schmidt had offered him a partnership in a business the defendant was planning to open in Malta.

During the police investigation, it emerged that Zammit had reached an agreement with Schmidt under which the defendant was to return the money by the end of 2015. On a second occasion, Zammit said he had needed cash and therefore donated an additional amount. gold to Schmidt to trade in Germany.

Eventually, Schmidt gave Zammit a receipt dated July 6, 2015 which showed that the gold had been exchanged at Pro Aurum in Germany for a value of €24,967.17. Arne Schmidt emailed Paul Zammit with a receipt from Ing Diba bank attached, stating that Schmidt had transferred money from his account with the German bank to Zammit’s Maltese bank account.

But the bank confirmed to Zammit that the transfer never took place and could never take place because the IBAN number of the German bank account contained an extra digit.

After successfully contacting Schmidt and being informed that the matter was being investigated, Schmidt severed contact after July 21, 2015. This led Zammit to suspect that Schmidt was not going to transfer the money and he therefore contacted the police. After investigating the case, Schmidt was arrested and questioned.

Ruling on the case, magistrate Josette Demicoli noted that Zammit withdrew its criminal complaint against Schmidt on February 24, 2022.

The magistrate objected to the defense assertion that the charge of fraud should be considered as an alternative to the charge of embezzlement, considered that the circumstances of the case and the evidence presented showed that the elements required for the subsistence of this accusation did not follow therefrom.

“The Court considers that the version of the facts given by the civil party is more credible than that given by the accused in his statements. The Court is satisfied that Paul Zammit gave gold coins and two bags of gold to the defendant and that the defendant had to exchange this gold for money and that he had to give the money to said Paul Zammit . Besides the fact that in his testimony Paul Zammit was convincing, there are also the receipts that Arne Schmidt sent… No reason was given to discredit this witness in any way,” observed the court.

“However, there was no staging. Paul Zammit handed over the gold pellets and gold coins after agreement that Arne Schmidt would exchange them for gold. There is no doubt that Zammit trusted the defendant completely. These circumstances, as presented, are more akin to embezzlement than fraud. »

The magistrate also noted that defense lawyer Arthur Azzopardi had exhibited a written agreement dated February 18, 2022 by means of which Paul Zammit and Arne Schmidt had reached an amicable agreement. Following a 2015 judgment by the Civil Court of First Instance, Schmidt had paid the outstanding amount of €65,511.95 to Zammit, as well as a separate payment of €10,000 made by the defendant on July 28, 2021 .

Considering that the businessman was also charged with embezzlement, the court, citing case law, established that the withdrawal of the fraud complaint meant that the embezzlement proceedings should also be declared extinguished.

Attorney Arthur Azzopardi represented Schmidt as defense counsel throughout the proceedings.

Inspector Christabelle Chetcuti prosecuted.

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