Nexia BT managing partner Brian Tonna and three other associates were granted bail on Tuesday by a court hearing criminal charges against them.
Tonna, his fellow Nexia BT partners Karl Cini and Manuel Castagna, and office manager Katrin Bondin Carter face charges of money laundering, forgery and other crimes in relation to inquiries into former OPM chief of staff Keith Schembri. They are all pleading not guilty.
The court’s decision to allow them to walk free while proceedings against them continue means that each of the 11 people arrested and charged in the wide-ranging criminal investigation sparked by the Schembri inquiries has now been granted bail.
Tonna and the other Nexia BT workers facing charges were the last of the 11 to be held in police custody, after a court granted Schembri and his co-accused bail on Monday at the third time of asking.
Magistrate Donatella Frendo Dimech told the court on Tuesday that she was pleased to see that investigations were progressing at a rapid pace and commended both the prosecution and defence of moving things along.
She said the pace of investigations was at the heart of her decision to allow the accused to walk free.
Tonna and Cini were given the most stringent bail conditions, with each required to pay a €60,000 deposit and bind themselves to €90,000 personal guarantees, sign a bail book once a day and respect an 8pm-7am curfew.
Castagna must pay a €30,000 deposit and put up a €45,000 personal guarantee and sign a bail book three times a week, while respecting a 9pm-7am curfew. Bondin Carter will be allowed out against a €15,000 deposit and €15,000 personal guarantee, must sign a bail book twice a week and stay indoors between 11pm and 7am.
Each of the four was ordered to deposit their identification documents – ID card, passport and driving licence – with the court before being allowed out of police custody.
The case against them resumes on April 15 at 9am.
Lawyer Stephen Tonna Lowell, who last week filed a request to refer the decision to refuse his clients bail, dropped that request after bail was allowed on Tuesday. Tonna Lowell represented Tonna and Cini in this case.
Lawyers Michael Sciriha and Matthew Xuereb represented Manuel Castagna while lawyers Franco Debono and Amadeus Cachia represented Katrin Bondin Carter.
Inspectors Joseph Xerri and Ian Camilleri led the prosecution, assisted by attorney general lawyers Elaine Mercieca Rizzo and Andrea Zammit.
Live blog
Live blog ends
3.51pm That's all from court for today. The case will resume on April 15 at 9am. Thank you for having joined us.
You can find a summary of the key events at the top of this article.
Emotional suspects
3.40pm Emotions erupt within the courtroom: Tonna hugs his daughter and other relatives, as Castagna embraces his partner.
Depositing documents
3.36pm Bail bonds will be paid by bank drafts and each of the accused must leave their ID card, driving licence and passport with the court.
They can all be escorted home to fetch those documents if needed, before they are allowed to walk free.
Manuel Castagna granted bail
3.33pm Manuel Castagna, like the others, is granted bail.
He must sign a bail book at St Julian’s police station three times a week and remain indoors between 9pm and 7am.
He must pay a €30,000 deposit and bind himself to a €45,000 personal guarantee.
Katrin Bondin Carter granted bail
3.31pm Katrin Bondin Carter is granted bail.
She must sign a bail book at Żejtun police station twice a week and remain indoors between 11pm and 8am. She must pay a €15,000 deposit and bind herself to a €15,000 personal guarantee.
Karl Cini granted bail
3.29pm Karl Cini is granted bail, with the same conditions as his colleague Tonna. Cini will sign the bail book at St Julian's police station and also have to pay a €60,000 deposit and bind himself to a €90,000 guarantee to be freed.
Brian Tonna granted bail
3.28pm The magistrate starts reading out her decisions on bail. She says investigations have been handled quickly over the past week.
Brian Tonna is granted bail.
He must deposit all travel documents, not approach prosecution witnesses in the case, sign the bail book at Żabbar police station every day and remain indoors between 8pm and 7am.
Tonna must also avoid being within 100m of the airport or 10m of the coast, pay a €60,000 deposit and bind himself to a €90,000 personal guarantee.
Prosecution objects to bail
3.24pm Mercieca Rizzo, representing the attorney general’s office, makes her arguments.
She notes that the first inquiry – into alleged passport kickbacks – is about more than “not believing Tonna” (about the ‘loan repayment). There was criminal wrongdoing, she says.
Defence lawyers’ arguments that others involved in a second inquiry (into alleged bribes to sell equipment to Progress Press) have been granted bail does not concern them.
Mercieca Rizzo says that the prosecution has done as the court asked and prepared witnesses and testimony over the past week, despite the holiday break. Investigations are still not yet wrapped up, she says.
The magistrate thanks both sides for their work in ensuring proceedings went smoothly and quickly.
“This year the holidays came for nobody,” she says.
Sciriha argues for Castagna
3.18pm Michael Sciriha makes his submissions on behalf of Manuel Castagna.
Sciriha reiterates that his client was not at all involved in an issue concerning €100,000 in payments from Tonna to Schembri (which Tonna claims was repayment of a loan).
He says he has made several arguments in his bail application, and asks the court to consider the financial resources available to each application should bail be granted.
Debono argues for Bondin Carter
3.14pm Debono notes that the court has held four sittings in two weeks, in the middle of a pandemic. The case has rapidly matured, he says.
“We made submissions just a week ago and there is no need for me to repeat arguments,” he says. “I feel the issue concerning ongoing investigations has been addressed. The court has allowed time and I feel bail ought to be granted.”
Tonna Lowell argues for Tonna and Cini
3.10pm Tonna Lowell argues that the prosecution’s arguments are based on a number of inaccuracies.
“All other accused have been granted bail,” he tells the court. “So it would be difficult to justify these accused here being denied it.”
[11 people were charged with money laundering and other crimes in connection with this investigation. All bar the four in the dock today have been granted bail].
The prosecution cannot prove its fears, Tonna Lowell argues, and those same fears exist for the others who have been granted bail.
"If there is some proof of fear, then the prosecution must show us that proof."
Bail submissions
3.04pm The court will now hear bail submissions from defence lawyers and the prosecution.
Stephen Tonna Lowell will be the first of the defence lawyers to make his arguments in favour of granting his clients bail. Reminder: Tonna Lowell is here representing Brian Tonna and Karl Cini.
Case will continue on April 15
3.02pm Before the court hears submissions on bail, it sets a date for the next court sitting: Thursday, April 15 at 9am.
Parties return
2.56pm The magistrate is back at the bench, and lawyers and prosecutors are filing into court.
For the prosecution, we have Elaine Mercieca Rizzo and Andrea Zammit from the attorney general's office and inspectors Ian Camilleri and Joseph Xerri from the police force.
For the defence, we have lawyers Stephen Tonna Lowell (for Tonna and Cini), Franco Debono (for Bondin Carter), Michael Sciriha and Matthew Xuereb (for Castagna).
Lawyer Gianella de Marco is also here, representing KBT Holdings.
Empty hall
2.49pm The one hour given to prosecutors to go over bail submissions has passed, but hall 22 is still empty, save for members of the press seated in the gallery.
A quiet day so far
2.05pm There have been few highlights to single out from testimony we’ve heard so far today. Witnesses have all been members of the police involved in searches and arrests of the four accused people or others charged as part of the same investigation.
Police searched homes and offices either late at night or early in the morning, and the sheer number of electronic devices seized – from phones to laptops, tablets to desktop PCs – mean the digital forensics team will have their work cut out.
Hearing suspended for one hour
1.50pm The magistrate tells the prosecution they have one hour – until 2.45pm – to go over the bail requests submitted this morning. She suspends the hearing until then.
When the case resumes, we expect to hear submissions on bail and possibly a decision about who will be appointed as financial controller to run Nexia BT.
Missing witnesses
1.45pm Prosecutor Elaine Mercieca Rizzo would like it added to the court record that some witnesses summoned today could not make it to court due to health issues.
Waiting patiently
1.42pm As the lawyers and prosecutors discuss, the witness waits at the stand.
The accused are also waiting, patiently. They appear much calmer than they were last week, when this court was last in session.
As lawyers return to their seats, the witness is told he can leave. It seems he was forgotten at the stand.
Crowding around
1.37pm Prosecutor Mercieca Rizzo asks to approach the bench. Representatives from all sides huddle around – there are seven lawyers and inspector Xerri –to discuss something out of earshot.
Reading Schembri his rights
1.34pm Police officers Colton Grech Micallef and Ezekiel Maniscalco also testify.
Grech Micallef was stationed outside while officers searched inside the Kasco factory and was also involved in a search of Allied Newspapers in Mriehel.
Maniscalco tells the court that Keith Schembri’s wife answered the door when police knocked at the Schembri home in Mellieha. Officers read Schembri his rights and explained their warrant.
Maniscalco says officers seized some devices from there – iPhones, iPads, several USB sticks – and a laptop and PC from the Kasco factory in Bulebel.
Nothing was seized from a premises in Cospicua, he says. Schembri and his wife were present for all the searches. Once the searches were done, Schembri was taken to the police lockup.
Financial profile of Bondin Carter
1.28pm Sciriha also tells the court that he was tasked with analysing financial transactions concerning one of the accused, Katrin Bondin Carter. But we won’t know more about that for now – Sciriha is done testifying for now.
Searching Tonna's office
1.25pm Police officer Jurgen Sciriha testifies. He was also involved in arresting Brian Tonna.
Sciriha tells the court that they started searching Tonna’s Marsascala home at 11.45pm and were done around one hour later. They then went to San Gwann and searched his office from around 1am to 2am.
A spot of disinfection
1.22pm As each witness steps off the stand, a court employee wipes down the witness stand and perspex shield in front of it.
Searching Tonna's home
1.19pm Sergeant Christopher Ellul is next to testify.
Ellul was involved in searches of Brian Tonna’s home in Marsascala, seizing two iPhones, an iPad and other devices.
Officers then moved to Nexia BT’s San Gwann offices at around 1am and spent the next hour seizing devices from there. He rattles off a list of devices seized - laptops, chargers, phones and so on.
Searching Castagna's home
1.15pm Another police officer assigned anti-money laundering duties, Clayton Demicoli, testifies.
He was involved in a search of Manuel Castagna’s house on September 21, 2020. Officers seized three laptops, five iPhones and various other items. Officers also seized two laptops and hard drives from Castagna’s office in San Gwann. That second search was concluded by 2pm.
Demicoli is followed on the stand by police constable Ritienne Ciantar, who was also involved in those searches. Ciantar says Castagna was present as officers searched his home and signed receipts for the seizures of electronic devices.
Zammit in quarantine during search
1.11pm Another police officer, Dorothy Camilleri, takes the stand as a witness. She is also part of the police’s FCID.
Camilleri was involved in the arrest of Robert Zammit last month in Mosta. [Zammit is Kasco’s financial controller and is facing money laundering charges separately].
She recalls knocking on Zammit’s door at 6.30am and being told that Zammit was under mandatory quarantine. Officers seized his phone and handed it to inspector Omar Caruana. Given that Zammit was COVID-positive at the time, they did not obtain his signature for the seized item receipt.
More searches
1.05pm Police constable Kirsten Gatt from the Financial Crimes Investigation Department is the next witness to testify.
She was involved in a search of Nexia BT offices in San Gwann last September, close to midnight. Karl Cini and another Nexia BT employee, Krista Grech, were present as police searched the building.
Gatt says the seized laptops, hard drives, documents and around €11,000 in cash. Later, they again searched Cini’s office and seized other devices. Cini was registered at the police lockup at around 4pm.
She was also involved in the search and arrest of Matthew Pace. Gatt says Pace showed up after they contacted his wife. The police continued their search until 8am. Pace was registered at the police lockup by 8.40am.
Sealed devices
1pm Another police officer [whose name we did not catch] takes the stand.
He tells the court that he was involved in a search of a Cospicua building regarding investigations into Keith Schembri, as well as one of the Kasco factory in Bulebel and that of Pace’s St Paul’s Bay home.
He says Pace himself gave the police the mobile phone and laptop. Officers sealed them and gave them to inspector Joseph Xerri [Xerri is one of the main prosecutors in this case].
Matthew Pace and his password
12.56pm Inspector James Turner is the day’s first witness.
Turner was involved in searches of Kasco’s factory in Bulebel on September 21 and 22, 2020, as well as a search of Matthew Pace’s residence at St Paul’s Bay.
[Pace is one of two Zenith Finance founders also arrested along with the Nexia BT four. He is being tried separately].
Turner tells the court that the police were unable to contact Pace, who then showed up later (the search happened early in the morning). They then seized a partly cracked mobile phone and a laptop. Pace did not wish to give investigators his device passwords, Turner says.
Pace was then escorted to police lockup. That's all from inspector Turner.
Accused want bail
12.52pm Prosecutor Elaine Mercieca Rizzo reveals that the four accused filed new requests for bail.
She’s not happy that all bar one of them – that by Stephen Tonna Lowell for his clients Tonna and Cini – only reached her desk this morning.
Court in session
12.50pm The four accused are all in court, sitting in chairs behind the wooden dock.
Brian Tonna’s daughter, Beverly Tonna, is also in court. She is here representing KBT Limited – one of the companies targeted by investigators.
The magistrate enters the hall and the court hearing gets under way.
Who are the protagonists?
12.45pm Brian Tonna: managing partner of Nexia BT and money man for Keith Schembri, Konrad Mizzi and others. Represented by lawyer Stephen Tonna Lowell.
Karl Cini: director at Nexia BT who handled a lot of the paperwork to open offshore structures for Schembri and Mizzi. An inquiry into secret company Egrant recommended that he be investigated for perjury. Represented by lawyer Stephen Tonna Lowell.
Manuel Castagna: a partner at Nexia BT who audited the accounts of Keith Schembri's company Kasco. Also sat on a three-person committee that awarded a deal to privatise three state hospitals to Vitals Global Healthcare. Represented by lawyer Michael Sciriha.
Katrin Bondin Carter: A manager at Nexia BT who backdated compliance documents for Nexia BT. Police told the court that she told them she was just following her bosses' orders. Represented by lawyer Franco Debono.
Magistrate Donatella Frendo Dimech is presiding.
Bail hopes
12.27pm Keith Schembri, the man at the heart of investigations that led to the arrest and prosecution of the four Nexia BT workers, is being released from prison today after being granted bail on Monday.
Defence lawyers for the four accused in this courtroom will have followed those proceedings closely. We expect them to file new bail requests for their clients today.
Reference request
12.20pm Last week, the court refused to grant the four accused bail, saying it was concerned by testimony stating that they had forged documents.
Brian Tonna and Karl Cini's lawyer, Stephen Tonna Lowell, argued vehemently against that decision and asked for a reference to another court. We expect the magistrate to rule on that request at some point during today's hearing.
Welcome
12.15pm Hello and welcome to this live blog. We're in hall 22 of the Valletta law courts, where the case against Brian Tonna and his co-accused is scheduled to resume at 12.30pm.