A court, presiding over money-laundering proceedings against Zenith Finance Limited and two former directors has directed the prosecution to “streamline” its evidence after questions were raised about its relevance.

On Tuesday morning several witnesses, summoned by the prosecution, presented documentation linked to money-laundering charges faced by Matthew Pace, Lorraine Falzon and the company they owned.

The sitting kicked off with an overview of investigations by prosecuting Inspector Joseph Xerri who recalled Pace’s statements to the police explaining that it was Nexia BT's Brian Tonna who had introduced him to former OPM chief of staff Keith Schembri.

Schembri had then advised Adrian Hillman and Vincent Buhagiar, former managing directors of Allied Newspapers, to use the services of MFSP - the predecessor of Zenith Finance Ltd.

Pace recalled how Schembri and Hillman had gone to him personally together and told him that Hillman was tendering media consultancy services to Schembri.

Presented with auditor statements, Pace claimed to have “peace of mind” about the source of funds.

That was between 2010 and 2012 when current legislation was not applicable, the witness explained.

Another MFSP director, Andre Micallef, had told police that Falzon was in charge of compliance and that information about the source of funds was always to be requested before the opening of accounts was green-lighted.

Information had been requested by the financial services watchdog about three clients who had all turned out to be Pace’s clients.

Following that overview by the prosecuting officer, witnesses from the MFSA presented documentary evidence about various companies with links to the accused, prompting presiding magistrate Donatella Frendo Dimech to question the relevance and urging the AG lawyers to limit questioning to the accused.

At one point, the testimonies were interrupted by a heated interlude between AG lawyer Andrea Zammit and defence lawyers Edward Gatt and Mark Vassallo, after the latter remarked that all the morning’s testimonies had already been presented in the inquiry.

That statement prompted the court to remark that to date, a copy of the in genere inquiry was still to be filed in the records of the case.

“Duplication of work is unacceptable,” said Magistrate Frendo Dimech, adding that the court would not allow doubling of costs, possibly ultimately to be borne by the accused.

Addressing the prosecution lawyers, the magistrate urged them to ask relevant rather than open-ended questions to witnesses.

“This is no fishing expedition! Please be more precise,” the court directed, prompting the AG lawyer to remark that it was “simply a style of questioning.”

But the next witness, an officer from the Capital Transfer Duty office, was cut short after the witness said that she had been asked to “bring all the information that the department had” about the accused.

The court pointed out that charges were limited between 2008 and 2018.

“I will not allow that. The request [by the investigators] must be streamlined,” said the magistrate.

At one stage, a comment from the prosecution side led the defence to record a minute, drawing the court’s attention to the right of the accused to a fair hearing by ensuring a level playing field.

During the earlier verbal spat, an AG lawyer claimed “jien naf sew x’fiha l-inkjesta.” (I know well enough what the inquiry found).  Gatt stressed that the records of the inquiry had not yet made it to the presiding magistrate nor the defence.

AG lawyer Zammit clarified that he was in no claiming to have full knowledge of the contents of the magisterial inquiry, adding that the prosecution had more evidence to put forward.

“It is not acceptable that the work of the prosecution and investigators is cast in doubt,” said the lawyer.

As testimonies resumed, Matthew Scicluna, an officer from the Financial and Compliance arm within MFSA, testified that following certain concerns, the Authority had carried out a visit at Zenith Finance Ltd on October 9, 2019 and prepared a report by February 2020.

In March that year, the report was handed over to the FIAU, said the witness, presenting a copy of the document which was admitted as relevant by the court.

Another officer from the MFSA Securities and Warranties department, Chardian Camilleri, said that the company, first issued a Category 2 licence in 2007, had been slapped with an administrative fine of €12,112 in October 2012 and another fine of €38,750 in June 2018.

After being targeted by a number of garnishee orders sparked by complaints, Zenith Finance Ltd sought to open more bank accounts even abroad, the court was told.

As business suffered on account of those court orders, the company resorted to other facilities such as overdraft and cash transactions.

Asked by the court to explain what he meant by garnishee orders, the witness said that it was a reference to the attachment orders issued last year by the criminal court, although he could not exclude some earlier garnishees.

Joseph Debono, representing the Commissioner for Revenue, presented copies of the accused’s tax returns for basis years 2008 up to 2019.

Lawyer Vincienne Vella, an officer from the VAT department, testified that Pace and Falzon were never registered for VAT purposes, while Zenith Finance has been registered since 2011 and was still active to date.

The case continues on May 12.