A bail hearing in the US on Wednesday claimed that the money used to set up Pilatus Bank in Malta came from criminal activities in Venezuela, which landed its former chairman in jail.
“His equity in Pilatus Bank is forefeitable because it constitutes criminal proceeds directly linked to the Venezuela project: the defendant [Seyed Ali Sadr Hasheminejad] used money from the project (1 million Swiss frances, and €8 million) to established and capitalise Pilatus Bank in 2013,” according to a transcript of the proceedings tweeted by MP Karol Aquilina.
BREAKING: US @TheJusticeDept reveals Ali Sadr Hashemi Nejad used criminal proceeds - €8million and CHF 1million- to establish and capitalize #Malta @PilatusBank in 2013. #shameless #fakeduediligence @edward_scicluna @JosephMuscat_JM @KonradMizzi @keithaschembri pic.twitter.com/qwu4okie8U— Karol Aquilina (@KarolAquilina) May 24, 2018
Mr Hasheminejad has claimed a net worth of $24 million, of which $12.9 million is equity in the Ta’ Xbiex-based bank.
Apart from his equity in Pilatus Bank, the lawyers said Mr Hasheminejad also owned an apartment in Washington, worth approximately $1.5 million, had interest in A&H Urban Lifestyle Investments worth approximately $227,115, interests in pistachio farms in California, $3.1 million in bank accounts in Cyprus as well as a further $70,000 in other bank accounts.
The information which emerged on Wednesday indicates that once the assets in the bank are ‘unwound’ by the Maltese authorities, “significantly less” than $12.9 million would be left.
Pilatus Bank was taken over by the Malta Financial Services Authority, with former US financial regulator Lawrence Connell being appointed to take charge of the bank’s assets, after the chairman was arrested in the US on charges of violating economic sanctions against Iran through a project in Venezuela, and with money laundering.
The bank has been linked to money laundering allegations involving the prime minister's chief of staff, Keith Schembri, and Tourism Minister Konrad Mizzi. Both have strongly denied the claims.
I, of course, had no doubt that @PilatusBank got its license thanks to cronyism. But I could not imagine that illegal proceeds have been used to establish it. How could @MFSAComm take such a risk? You don't need a Russian spy, guys, you are pretty self-destroyable ))) https://t.co/jA92BfIKU4— Maria Efimova (@MariaEfimova7) May 24, 2018
Last year, slain journalist Daphne Caruana Galizia reported that the prime minister's wife was the ultimate beneficiary of funds in a secret Panama Company - Egrant - and some one million dollars had been deposited there from Azerbaijan via Pilatus Bank. The information, which was strongly denied by the prime minister and his wife, was partly-based on claims made by a former bank employee, Maria Efimova.
Release report now, MEP tells MFSA
The new revelations that proceeds of crime were used to set up Pilatus Bank puts the Malta Financial Services Authority into the spotlight, Nationalist MEP David Casa said.
During a meeting with MEPs at the TAX3 Committee, MFSA representatives had informed MEPs that during the due diligence process they had commissioned an ‘intelligence report’ by a foreign independent firm that cleared Pilatus Bank. The MFSA would not divulge the identity or further elaborate on the contents of this document.
“That this whole affair has been a train wreck for the MFSA is not in question. The MFSA should have protected Malta’s financial sector. Instead, it allowed Keith Schembri’s banker to set-up shop and conduct criminal activity with complete impunity," Mr Casa said in a statement.
If the ‘intelligence report’ that the MFSA claims was commissioned exists, it should be published immediately.
"It might slightly mitigate the huge damage this whole affair is doing to the MFSA’s reputation and for establishing whether this is a case of gross negligence or complicity. What is certain at this point is that it is either one or the other.”