A total of €148 million in client funds are still frozen at the now-defunct Pilatus Bank.
The bank’s operations ground to a halt in 2018 after regulators stepped in following the arrest and prosecution of Pilatus owner Ali Sadr in the US on money-laundering charges.
In an update tabled in parliament, the bank’s MFSA-appointed administrators PwC said they have consistently received claims from the bank’s depositors requesting release of their funds.
Their requests could not be entertained due to MFSA directives and court freezes on funds held at Pilatus.
PwC said depositors may have to wait until the conclusion of the criminal case against the bank, which started in 2021, before gaining access to their funds.
Although prosecutors allege the bank was used to launder its clients’ money, no legal action or investigations by the police appear to have been pursued against those same clients.
Instead, the bank and former bank official Claude-Anne Sant Fournier have been charged for allegedly facilitating the money laundering.
Prosecutions against other top officials, including Sadr, have yet to materialise despite pending warrants for their arrest.
Last month, an appeals court upheld a €5 million fine against Pilatus by the Financial Intelligence Analysis Unit.
The court said Pilatus failed to abide by its basic obligations as a financial institution by allowing huge transactions to be processed without scrutiny.
Pilatus was slapped with the €5 million fine in 2021 for its “total disregard towards necessary anti-money laundering and terrorism financing safeguards”.
The appeals court agreed with the FIAU, saying the bank allowed huge transactions to be processed without scrutiny.
According to a summary of the decision posted on the FIAU’s website, the court said Pilatus had lost every control over its business operations, which can be said to have been dictated by the exigencies of the clients it was dependent upon.
The court also rejected the bank’s argument that the fine was excessive.
It said the considerable amounts being processed by the bank, together with the clients’ identity, undoubtedly increased the risks of money laundering and funding of terrorism for the bank.
The bank was found to be dependent on a number of wealthy politically exposed Azerbaijani clients.