The Financial Intelligence Analysis Unit (FIAU) in Malta has fined the now-closed MPM Capital financial services firm a record €1.18m for operating as an unlicenced payment services provider.
The Malta Financial Services Authority (MFSA), the island's regulator, had already closed down the company earlier this month for having carried out remittance services without the correct licence and providing false information to the MFSA.
In addition, MPM Capital's directors, Alexander Mangion and Melvyn Mangion, were given a 10-year prohibition on working within any MFSA-licensed positions in the financial services sector in Malta.
The company failed to understand how a customer with a yearly income ranging between €11, 347-€12, 678 could have generated such substantial wealth."
Many of the company's files were found to have been inaccurate or contradictory. The FIAU noted that one of the customers' employment was marked as "technician" in some files and ‘real estate director' in other documents. The client's annual income of €50,000 was recorded as just €12,000.
The FIAU said in a statement: "The company failed to understand how a customer with a yearly income ranging between €11, 347-€12, 678 could have generated such substantial wealth. The company also tried to explain that the €5.6m wealth related to €2.7m worth of investments and €2.2m worth of real estate property."
"Although the company provided a series of contracts of sale and documents pertaining to loans the customer had in order to substantiate this explanation, these documents could not substantiate how the customer managed to generate such substantial amounts. Moreover, in its representations, the company further clarified that most of the customer's wealth related to inheritance, however this explanation was not substantiated with any documentary evidence."