Francine Farrugia faces court over MCAST payroll fraud case

Francine Farrugia, formerly employed as a manager in the salaries department at the Malta College of Arts, Science and Technology (MCAST), appeared before the court on Thursday facing allegations of misappropriating over €2.3 million through duplicate payroll entries. The case has attracted significant attention due to the scale of the alleged misconduct and involves multiple serious charges, including money laundering, fraud, and the misappropriation of public funds.

Farrugia, who also previously served as a local councillor for Siġġiewi, entered the courtroom wearing a protective face mask and accompanied by a nurse, highlighting ongoing health precautions. She now faces legal proceedings that could lead to substantial penalties if the allegations are proven.

Alleged exploitation of payroll system

The court was informed that Farrugia is alleged to have exploited her position and special access to MCAST’s internal payroll system to submit duplicate salary payments over a span of two years. These entries were purportedly created to divert funds into her personal bank accounts. The total amount allegedly misappropriated has been reported as €2,337,258.80.

Inspector Wayne Rodney Borg, presenting the case to the court, described how internal audits and investigations uncovered suspicious financial transactions. “The accused had access to the salaries system, which she allegedly manipulated by making double entries,” Borg said.

A specific example cited during the hearing involved a fictitious entry under the name “John Borg,” where the employee’s legitimate salary was deposited correctly, but a second identical payment was redirected into accounts controlled by Farrugia. The court was informed that this technique was repeated using multiple other employee names over time.

Analysis of funds allegedly misappropriated

An investigation into Farrugia’s bank activity revealed transfers to several accounts, indicating a wide distribution of the alleged funds. Around €422,000 was reportedly transferred to her Revolut account, while another €1.9 million was spread across accounts at APS Bank, HSBC, Bank of Valletta (BOV), and MeDirect.

At first, the repeated payroll transactions ranged from €5,000 to €6,000 each, but gradually the amounts grew, with some transfers reportedly reaching €18,000 by 2025.

Inspector Borg also noted evidence of extravagant spending. Police reports cited €113,000 spent at Harrods in London, while searches of Farrugia’s residence uncovered luxury clothing, designer handbags, and high-end jewellery, including a €5,000 necklace validated by a recorded transaction. Additional documents revealed recent property sales, providing further evidence of financial activity.

Cooperation with authorities and evidence collection

While Farrugia chose not to respond to questions during her police interview, a CD recording of the session was presented as evidence in court. Inspector Borg noted that, despite her refusal to answer, she assisted authorities by providing access to her properties and handing over keys to enable thorough searches.

These searches, completed on 11 August 2025 with the assistance of her legal team, reportedly uncovered additional high-value purchases and property-related documentation, strengthening the prosecution’s evidence.

Testimony from MCAST Chief Financial Officer

Marita Brincat, the Chief Financial Officer of MCAST, provided testimony during the court hearings. She outlined her responsibilities, which include preparing accounts for auditing and overseeing financial operations. Brincat clarified that payroll management falls under a separate department.

She stated that she first noticed the irregularities after the police supplied a Revolut account for examination. Her analysis indicated that in May 2025 alone, twelve transactions intended for employees had instead been deposited into Farrugia’s account. Payslip reviews showed employees received no excess payments, indicating that discrepancies existed only in the bank files.

Alleged removal of fraudulent entries

Brincat explained that the payroll system permits employees’ salaries to be distributed across two separate accounts. Her responsibility includes comparing bank files to payroll records to ensure consistency. However, she testified that the fraudulent payments had been intentionally removed from the system before her review, complicating detection.

One illustration involved a payslip showing a legitimate salary of €2,000, while a second, hidden entry recorded a post-tax adjustment of €9,000 deposited into Farrugia’s account. Brincat highlighted that no MCAST staff members reported any missing wages, and the 2023 audit conducted by PKF Malta found no discrepancies.

During cross-examination, she admitted that while the system generates audit trails, she had not reviewed them, considering it unnecessary at the time. Defence lawyer Peter Fenech asked whether the payments could have been blocked without her approval. Brincat confirmed that approval was required, but by the time checks occurred, the fraudulent entries had already been removed.

Testimony of payroll unit colleague

Anita Muscat, a colleague of Farrugia in the Payroll Unit, provided testimony. She stated that once the payroll information was entered, Farrugia would generate a payroll file for Brincat’s review before preparing the corresponding bank file. Muscat recounted an incident where she submitted a bank file herself, only for Farrugia to later indicate a correction was needed and resubmit it to Brincat.

Bail proceedings

The defence requested bail, which the prosecution did not contest, provided strict conditions were imposed. Bail was approved with a €50,000 deposit and a €25,000 personal guarantee, requiring Farrugia to report daily at Qormi police station from 8am to 4pm. She was cautioned on the repercussions of violating the bail terms.

The following court session was set for 26 August at 9am. Farrugia was represented by defence attorneys Peter Fenech and Amy Zahra, while the prosecution was led by AG lawyers Alessia Schembri and Michael Muscat, with support from Inspector Wayne Rodney Borg. Attorneys Stefano Filletti and Thea Licari represented MCAST. Magistrate Rachel Montebello presided over the case.

Implications for MCAST and public sector governance

The allegations in this case highlight the challenges faced by public institutions in preventing internal financial misconduct. They raise questions about the effectiveness of oversight mechanisms and the need for robust auditing and reconciliation processes. Despite Brincat stating that standard procedures were in place, the claims suggest vulnerabilities in payroll management systems when a single individual has extensive access privileges.

Governance experts note that such incidents, though uncommon, can significantly impact institutional trust and accountability. Recommendations include regular independent audits, stronger segregation of duties, and the implementation of real-time monitoring tools to reduce the risk of payroll system exploitation.

Next steps in the proceedings

Upcoming hearings will continue to examine financial records, bank transfers, and payroll files. Witness testimony is expected to explore the scope of the alleged misappropriations and the internal controls that may have been bypassed. Legal analysts suggest that the outcome of this case may set precedents for how public institutions in Malta detect and respond to internal fraud.

Conclusion

The Francine Farrugia case is a high-profile example of alleged internal financial misconduct within a public institution. The charges, which include money laundering, fraud, and misappropriation exceeding €2.3 million, underline the risks associated with insufficient oversight. Court evidence has highlighted the alleged diversion of funds through duplicate payroll entries and substantial personal expenditures.

The proceedings emphasize the importance of stringent internal controls, transparent audits, and vigilant supervision of public funds. As the legal process continues, the case may act as a cautionary tale for public sector organisations, reinforcing the need for accountability and preventive measures to protect public resources. Further hearings will provide clarity on the evidence, alleged misconduct, and broader implications for MCAST and similar institutions.

FAQs

What charges does Francine Farrugia face?
Francine Farrugia faces charges including money laundering, fraud, and misappropriation of public funds exceeding €2.3 million.

How did Farrugia allegedly commit the fraud?
She allegedly submitted duplicate payroll entries in the MCAST salary system, diverting funds into her own bank accounts.

How much money was allegedly misappropriated?
Investigators claim that €2,337,258.80 was fraudulently transferred over a two-year period.

Were any employees affected by the fraudulent transactions?
No MCAST employees reported missing payments, as the inflated amounts were diverted before reaching them.

What evidence has been presented in court?
Evidence includes bank records, payroll files, a CD recording of Farrugia’s police interrogation, and documents from searches of her properties.

Did auditors detect the fraud?
Auditors from PKF Malta did not report any irregularities in 2023 when the alleged fraud began.

What are the conditions of Farrugia’s bail?
Bail was granted with a €50,000 deposit, a €25,000 personal guarantee, and daily reporting at Qormi police station.

Who are representing Farrugia in court?
Her defence lawyers are Peter Fenech and Amy Zahra.

What role did Marita Brincat play in the investigation?
As MCAST CFO, Brincat reviewed payroll discrepancies and confirmed that inflated payments were visible in bank files but not on employees’ payslips.

When is the next court session scheduled?
The next hearing is scheduled for 26 August at 9am before Magistrate Rachel Montebello.