A magisterial inquiry into kickbacks on citizenship-by-investment schemes is still being kept under wraps – but the arrests of Keith Schembri, the former Prime Minister’s Chief of Staff, and Nexia BT’s Brian Tonna and Karl Cini mean it must be revisited.
Over 100 companies, business partners, and family members have been named in the court order demanding assets be frozen, with sources telling Lovin Malta that they will be called into the depot over the next few days.
A three and a half year long magisterial inquiry could be yielding major results, but here are six things you need to keep in mind until then.
1. What is the magisterial inquiry about?
According to a leaked report by the Financial Intelligence Analysis Unit (FIAU), Tonna transferred two €50,000 payments through Pilatus Bank to Schembri.
Schembri is facing allegations that the payments were kickbacks related to the sale of Maltese citizenship to a family of three Russian nationals.
Then-PN leader Simon Busuttil spearheaded the claims, launching the request for an inquiry in April 2017.
Busuttil initially took the claims to the Egrant inquiry. However, the magistrate decided to initiate a separate inquiry, carried out by magistrate Natasha Galea Sciberras.
Last week, newly-appointed Attorney General Victoria Buttigieg refused to publish the inquiry’s conclusions. She received major criticism for doing so.
However, with assets frozen, arrests underway, and more to follow, it seems that authorities were waiting to pounce.
2. What is the court order?
On Independence Day, a court issued a freezing and garnishee order on all assets held by Schembri, as well as those of his accountants at Nexia BT, Brian Tonna and Karl Cini.
There was a long list of companies and names listed on the court order, which included several family members of those linked to the case, and even extended to a baby born in 2020, another in 2018, and another in 2017.
Key figures named in the document are Nexia BT’s Manuel Castgna, who played a role in selecting the operator for Malta’s new gas-fired power station, the Electrogas consortium of which Yorgen Fenech forms part.
Tara Cann Navarro, a senior official at our Malta’s Financial Services Authority, is also named. Her husband Luke Cann is a partner at Nexia BT.
One of Keith Schembri’s daughters is noticeably absent for the document. However, sources have suggested that more people could be named in the coming days.
When it comes to Nexia BT, the company recently hived off much of its operations to another company, Reanda.
3. What is the cash-for-citizenship scheme?
Launched by former Prime Minister Joseph Muscat in 2013, the Individual Investor Programme allowed foreign nationals to purchase Maltese citizenship at a cost of €650,000. Family members of buyers are then allowed to purchase passports at a fraction of the price.
4. What did Keith Schembri and Brian Tonna say on the allegations?
Both men have denied any wrongdoing, with Schembri claiming that the €100,000 was a repayment of a personal loan given to Tonna while the former underwent separation proceedings.
The loan was repaid through Willerby Trading, a British Virgin Islands shell company secretly owned by Tonna.
The same FIAU report also raised suspicions of the loan document presented to the bank to justify the payments after finding no trace of the original loan payment by Schembri to Tonna.
5. Will Keith Schembri be charged?
It is still too early to say. The issuance of an investigation and attachment order does not, in itself, confirm that a prosecution will certainly take place. However, these new arrests make it seem it is going that way.
Schembri has been arrested before, notably last November in the wake of Yorgen Fenech’s arrest in connection with the assassination of journalist Daphne Caruana Galizia. He was released without charge then.
The police now have 48 hours to charge Schembri with a crime, if not they will have to release him on police bail.
6.What other inquiries are still on the way?
With so many other corruption allegations bogged down in lengthy magisterial inquiries, it’s easy to forget how many are actually underway.
Schembri himself is subject to two other criminal inquiries.
The first involves another leaked FIAU document detailing how Schembri filtered over €650,000 to former Allied Newspapers managing director Adrian Hillman in over 30 “suspicious transactions” between 2011 and 2015.
Hillman was also found to have deposited €225,000 in cash into his personal HSBC account between January 2011 and February 2016.
Schembri is also subject a magisterial inquiry over his involvement in the Panama Papers scandal, with particular focus on his role, as well as that of disgraced former Minister Konrad Mizzi.
Their Panama accounts are linked to 17 Black, the Dubai-based company owned by Yorgen Fenech, the main suspect in the Daphne Caruana Galizia case.
A report by the FIAU found that 17 Black had received at least three payments – one of €161,000 from a Maltese local agent for the tanker supplying gas to the LNG power station and two separate payments amounting to €1.1 million through ABLV Bank by an Azeri security guard.
Four and a half years later, the case is finally moving at a rapid rate with a potential glimpse of justice on the horizon.
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