Court acknowledges ‘difficult’ access to banking services in confectionary money laundering case

A woman from Marsa was this week found guilty of operating as a financial institution without a licence and money laundering for cashing thousands of cheques for almost 3,000 people over more than 10 years.

Clients would frequently come to Josephine Harmsworth’s confectionery to cash their cheques, a service she would provide against a variable fee – something charging a flat fee, other times €1 per €100 cashed, and other times for free.

The deliberations of the Court, presided over by Magistrate Leonard Caruana, make for sombre reading for Malta’s banking sector, which was shown, through the case, to be inadequately serving a swathe of the population.

Witness after witness explained how Ms Harmsworth’s services, while illegal, were useful.

One, an African migrant, testified that he had no bank account at the time, while two Maltese clients pointed to their long working hours, pointing out that these conflicted with banks’ opening hours.

For others, it was simply a matter of speed of service, while others were subject to legal proceedings or frozen assets.

More than one said they would buy products from the confectionery on credit, with the balance deducted from their cheques when they go to cash them.

Several were recipients of social assistance.

The service was not particularly secret, with one client testifying that there would at times be a line of persons queuing outside the small shop right in front of the Marsa parish church, within the police station’s line of sight.

The Court acknowledged that “in the majority of cases, clients testified that they used the cheque cashing service because it was not possible for them to go cash the cheque at a bank.”

Ms Harmsworth’s defence pointed out that the service she provided was a social one, with her shop providing “support (wens u sostenn) to those who, for one reason or another, could not conduct their affairs otherwise.”

It also argued that many other such small village shops provide similar services, saying that Ms Harmsworth was singled out “unjustly due to an effort by authorities to achieve certain international objectives” – a reference to increased enforcement on possible financial crime following Malta’s greylisting by the global Financial Action Taske Force.”

Put simply, Ms Harmsworth, who was simply providing a needed service in her community, and who had been doing so openly for many years without anyone batting an eyelid, was now caught up as collateral damage as Malta’s authorities conducted a flurry of actions to clean up the country’s image – an image that was certainly not sullied by activities of this nature.

The Court, while sympathetic to the needs of those using the service, made it clear that anyone providing a service should first ensure that they were in conformity with the law.

“Being genuine or good hearted does not exempt a person from their obligation to abide by the law,” it said.

Ms Harmsworth was sentenced to a two-year prison term, suspended for four years, and fined €42,000.

However, she was exempted from paying a €60,000 bill presented by the Court-appointed administrator of her business.