Top Albanian Judge’s ‘Illegal’ Riches Come to Light

Tirana Appeals Court Judge Alaudin Malaj | Photo by : LSA

After 22 years as a judge, Alaudin Malaj, the head of the Tirana Appeals Court, believes owing Cartier watches is no sign of a luxurious lifestyle.

In an interview last month, the judge, who has been charged with money laundering and concealing his wealth, added that cars that are not brand new cannot be considered luxury items, either.

“I cannot accept that a car produced in 2008 is luxurious,” Malaj told Albania’s Ora News TV.

The judge drives a 2011 Mercedes S350, which cost him €63,000, a fraction of his disclosed wealth, estimated at €1.7 million.

According to the High Inspectorate for the Declaration and Audit of Assets and Conflict of Interests, HIDAACI, much of this money was amassed illegally.

It was then concealed through a scheme that involved lodging companies in the name of relatives to cover the origin of the cash.

The HIDAACI says that in 2003, the first year when the law forced public officials and judges in Albania to disclose their assets, Malaj had a declared wealth of €60,000.

Eleven years on, the family of the Appeals Court judge is estimated to own combined assets worth €1.7 million spread over business investments and real estate.

After a recent audit of his assets disclosures declarations, the HIDAACI discovered that the judge and his wife had received shares in companies from his parents – transfers that the agency deems fraudulent.

The investigation into the judge’s assets revealed that Malaj and his wife, Edlira, received 46 million lek (€337,000) and two apartments from the judge’s parents alone.

Meanwhile, the judge’s wife has been declared the administrator or owner of two construction companies that Malaj’s parents founded. She also owns a pharmaceutical company in Kosovo.

The HIDACCI says that over an 11-year period, Malaj filed 24 fake asset disclosure declarations to cover the real source of his wealth.

The Durres prosecutor’s office is investigating the charges against him and has filed criminal proceedings.

Malaj refused to comment to BIRN on the charges that the HIDAACI has filed. However, in the TV interview last month, he expressed shock that the agency had made his wealth public.

“I have the earnings from my salary and from participation on various boards and my wife has a public notary business,” he said.

“People in political circles have got used to making millions without any work, which is why they bother us judges,” Malaj added.

Real estate proves safe bet

Alaudin Malaj is a career judge. Since completing college studies in 1993, he has been a first instance and appeals court judge.

In 2014, the centre-left ruling parties blocked a presidential decree nominating him to the Supreme Court owing to a political row with the head of state.

Earlier, in 2006, Malaj was transferred from Vlora Appeals Court to the Tirana Appeals Court.

In 2012, the High Council of Justice nominated him as head of the Tirana Appeals Court.

According to his asset disclosure declaration, in 2003 Malaj owned only an apartment of 106 square metres.

He bought this for 7.8 million lek (€52,700), which he collected through the sale of another apartment in Vlora and a loan from his parents of 2.85 million lek (€20,000).

The HIDAACI says that Malaj lied in his disclosure about receiving a loan from his parents because the sum never appeared in his subsequent declarations with the agency.

According to the HIDAACI, Malaj bought six apartments in Tirana and Durres between 2003 and 2014, while his father gifted Malaj’s wife, Edlira, with two other apartments.

The real estate portfolio turned into a cash generator for the judge’s family after he rented some of them out at above-market rates and sold others for many times the purchase price.

In his asset disclosure declaration in 2010, Malaj says he had bought a single-storey villa in a resort in the village of Golem near Durres for $35,000 (€32,900).

Four years later, he sold the same villa for €150,000.

The HIDAACI also claim to have discovered a dubious scheme of real-estate transfers involving his father and wife.

Malaj’s father, Hasan, bought one apartment in 2006 for €61,000 and gave it to Edlira in 2012, it noted.

In 2014, Edlira sold the gifted apartment to her brother for €120,000. The HIDAACI says that neither the judge’s father nor his brother-in-law had any income that could explain where they got the money to buy the apartments.

“This type of transaction, acquisition and sale of real estate among family members is a typical money laundering scheme,” the HIDAACI file with the prosecutor’s office says.

Malaj and his wife seemed to stop their real estate investments in 2010 when they declared the purchase of the home where they now reside on Sami Frasheri St in Tirana, near the city’s artificial lake.

The duplex apartment covers more than 300 square metres. Malaj says he bought it for 21.5 million lek (€158,000), which means a cost €442 per square metre.

The HIDAACI underlines in its complaint to the prosecutors that the declaration must be false.

This is because the company that constructed the apartment complex, TID sh.p.k., says each square metre in the building was sold for between €800 and €2,000.

The calculations of the HIDAACI show that the apartment in 2010 must therefore have been worth about 54 million lek (€368,160).

“The apartment had a minimum cost of 34 million lek (€250,000) and a maximum cost of 70 million lek (€514,000),” the complaint with the prosecutor’s office reads.

New business opened in Kosovo

The judge’s immediate family meanwhile controls four companies, including Algan sh.p.k., a construction company founded in 1998, Lili sh.p.k., trading in trade bottled water, founded in 2002, Rigels Sh.p.k., another construction company, founded in the same year, and lately Medbrand KS, a pharmaceutical company created in Pristina in October 2014.

In the complaint filed against Malaj, the HIDAACI says it suspects the judge used companies held in the name of his family members to conceal illegal income and assets through the transfer of shares or the use of joint personal and company accounts.

Algan sh.p.k is the family’s most important business. The judge’s mother founded the construction company but his brother controls it now. Over 14 years, the company has raked in 221 million lek (€1.62 million) in profits.

In 2007, Malaj’s wife, Edlira, became a shareholder after her mother-in-law gifted her 40 per cent of the shares worth 3.9 million lek.

As a shareholder Edlira Malaj has earned millions in dividends and also took out a loan in the company’s name to buy the Tirana duplex apartment on Sami Frasheri St.

In the 2014 asset declaration, Edlira Malaj wrote that she had withdrawn from Algan sh.p.k, and from the shares given to her in 2007 and had sold them back to her mother-in-law for 3.9 million lek.

At the same time, Edlira has also been a shareholder in the company Rigels Sh.p.k, after her father-in-law gifted her 90 per cent of the shares. However, her income from this company has been less.

In 2013 she opened a notary office, creating another source of revenue for the family.

Her asset disclosure claims that she earned 25 million lek (€180,000) from the business in 2013 and 14 million lek (€100,000) in 2014.

HIDAACI believes this self-declaration is false because such revenues are far suspiciously high for a public notary business.

In October 2014, Edlira Malaj founded the company Medbrand KS Sh.p,k. in Pristina with a starting capital of €1,000.

The Kosovo business register says the company of two employees engages in the wholesale trade of orthopedic medical equipment.

The criminal complaint filed by the HIDAACI says Malaj transferred €300,000 to the company in Pristina.

Of this figure, €150,000 of which came from the house sold in the village of Golem, €100,000 from an apartment she sold to her brother and €50,000 from her bank account.

HIDAACI has no record of how this money was invested in Kosovo. However, in the complaint, Chief Inspector Shkelqin Ganaj asserts that the judge has accumulated €1.6 million by hiding the origin of the money through false declarations.

“The suspect has concealed his wealth and made false declaration of his private interests while there are suspicions of money laundering,” the agency concluded.