Keith Schembri has been denied bail for a second time after a magistrate declared that allegations he forged documents do "not give the court the peace of mind it needs".

The former prime minister's chief of staff and his close business associates Kasco CEO Malcolm Scerri and accountant Robert Zammit will remain in custody for the time being.

They have been at Corradino Correctional Facility since March 20 when they were among 11 people arrested and charged with corruption, money laundering, fraud and forgery. All but one were refused bail at the first hearing. 

Matthew Pace and his associate Lorraine Falzon from financial services firm Zenith were granted bail on Friday. 

Among the accusations facing Keith Schembri is that he paid around US$5.5 million in backhanders to three men for the sale of printing machines to Progress Press, using convoluted transactions to mask the corruption and defraud the company in 2008. 

Auditors Nexia BT and financial services firm MFSP (now Zenith) are accused of helping facilitate the corruption by acting as "professional money launderers". 

A second investigation is into an unaccounted for €100,000 payment from Nexia BT's managing partner, Brian Tonna, to Schembri.

Announcing her decision on Tuesday, Magistrate Donatella Frendo Dimech made it clear she was denying the men bail at this stage, with emphasis on “this”. She urged the prosecution to wrap up its investigations as quickly as possible.

Keith Schembri’s elderly father, Alfio had his bail request granted against a €20,000 deposit and €50,000 guarantee. 

He was instructed to deposit his passport, ID card and driver’s licence with the court, live at his Cospicua home, not approach the coast and sign a bail book at the Cospicua police station.  

In reading her decree, the magistrate said that defence lawyers were right to argue that the accused are innocent until proven guilty. But being freed from arrest is not automatic and the allegations that Schembri forged documents “do not give the court the peace of mind it needs”. 

The magistrate said that not all strands of crime had been intercepted yet and there was a real danger of interfering with ongoing investigations. Third parties who may be involved have not yet been identified or charged.

Follow the continuation of proceedings on our live blog.

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