A magisterial inquiry into the now defunct Pilatus Bank has been handed to the State Prosecutor and is being assessed for possible criminal action.
Sources said the hefty inquiry was concluded by Magistrate Ian Farrugia earlier this month and recommends criminal proceedings be initiated against a number of bank personnel.
The magistrate’s findings will also support an ongoing police investigation which is understood to be at an advanced stage.
Times of Malta reported that police had been expected to file charges against Pilatus Bank officials over the summer but the sources said this was put off, partly to await the conclusions of the magistrate’s own investigation.
The inquiry document, known as a proces verbal, was described by the insiders as “voluminous”. It contains expert reports including a lengthy analysis by a UK-based forensic accountancy firm.
The magisterial inquiry into potential criminal wrongdoing by employees at Pilatus Bank was launched just before the bank was shut down by the European Central Bank two years ago – in November 2018.
Magistrate recommends criminal proceedings against bank personnel
The bank’s former chairman Ali Sadr was arrested in the US on sanctions-busting and money-laundering charges in March 2018.
Sadr has since been convicted on the sanction-busting charges but acquitted of money laundering.
Weeks before his arrest, the Financial Intelligence Analysis Unit (FIAU) had conducted a surprise visit at the bank, during which all its data was seized for analysis.
Concerns about the bank’s activities were first raised in a compliance review by the FIAU’s anti-money laundering unit in 2016 but Pilatus successfully contested its findings.
The compliance report, which was eventually leaked, said the “veil of secrecy” that had been created at Pilatus Bank made it easier for transactions to be carried out by politically exposed persons, their family members and their close associates, without the level of scrutiny required by law.
Separately, in a report sent to the police, the FIAU had flagged two suspicious transactions at the bank involving an account owned by former OPM chief of staff Keith Schembri.
A year later, investigative journalist Daphne Caruana Galizia thrust the bank into the spotlight with reports about the high ratio of Azerbaijani clients there.
Former prime minister Joseph Muscat called for a limited inquiry into the journalist’s claims that Pilatus Bank was used to pass on kickbacks to Egrant.
Although the Egrant inquiry did not find any evidence of kickbacks or links between Egrant and Muscat’s wife Michelle, the inquiry ordered the police in July 2018 to probe potential money-laundering activities at the bank involving Azeri elites.