A man encouraged to invest his savings in Ryan Schembri’s business by a familiar face recalled in court on Tuesday how he had initially handed over €500,000 in cash after being assured that the Schembri family were people of integrity.
It was sometime around September 2013 when Joseph Difesa bumped into an acquaintance, who he did not know by name but who he used to meet at the office of his financial investment advisors, Calamatta Cuschieri.
“He told me that, at the time, there was nothing good to invest in but he mentioned Ryan Schembri and directed me to his business premises at Ħandaq,” started off Difesa, when testifying against Schembri on Tuesday.
Schembri is currently pleading not guilty to fraud and money laundering estimated to run into tens of millions of euros, after being arrested in Scotland and extradited to Malta to face prosecution after absconding in September 2014.
Difesa had followed up that suggestion by heading to Ħandaq for a first-hand check of Schembri’s business set-up and was rather assured by what he found.
Schembri’s secretary put him in touch with her boss who fixed a meeting with Difesa at his rented villa in Birkirkara.
On the day, he observed a lot of activity, with people coming and going, handling files and so on.
“There seems to be a thriving business here,” Difesa had thought to himself, assured further when Schembri explained how he welcomed private investors in his meat industry, people who would entrust him with their funds and get a return on their investment.
When Difesa voiced his concern about what would happen if something went wrong, negatively impacting the business, Schembri had pulled out some insurance papers to reassure his potential investor.
“But he might as well have shown them to me upside down since I don’t read,” said the witness.
After asking around and being told that Schembri was from “a good family,” he withdrew €500,000 in cash from his financial advisor and handed the money to Schembri for a one-year term, with returns being offered on a monthly or three-monthly basis or as agreed upon.
Then, around April 2014, when he presented one of the cheques at Banif Bank, he was turned away and told not to return with such cheques because Schembri “did not have money”.
So Difesa called the businessman himself and after telling him what had happened, he was invited to go to him directly for the cash. “He did not argue,” said Difesa, explaining how he would tell Schembri to cash the cheques in full or in part according to his needs.
But when Schembri’s business went bust, he was left with a “bundle” of uncashed cheques which on Tuesday he presented in court as evidence.
Among those were cheques for €16,000 and another four for €27,000 each.
When asked why he continued to accept cheques after the bank had turned him away, Difesa said that he could always get the cash from Schembri, pointing out that he did not need all those funds in hand back then since he was earning a living.
Moreover, he saved those uncashed cheques to invest in Schembri’s promised “new” venture, namely supplying cruise liners with meat and other food products.
He had invested US$1,015,000 in Schembri’s business, Difesa testified.
Before handing over the money, he had gone to Ħamrun in search of Ryan’s father to make sure that the business was trustworthy.
“Listen, is this ok? If I lose this money I’ll end up talking to myself,” the witness had told Ryan’s father.
“We’ve been in this business for three years,” the man had replied reassuringly.
Under cross examination, the witness rebutted the defence’s argument that he had actually cashed “lots of cheques and lots of money”.
“How come there isn’t one cheque that was referred back to drawer,” asked Schembri’s lawyer, Roberto Montalto.
Difesa insisted that he had only tried to cash those cheques once at the bank and after being told to “go away” had got the cash from Schembri.
The last payment was affected some four or six months before the businessman disappeared from Malta, leaving behind a trail of disgruntled creditors.
Schembri would say that if things were to go wrong he would refund his creditors within two years.
“Shall I tell you how I cried when he fled” said Difesa, recalling how shortly before the end, Schembri had asked him for a small loan.
'I fainted. I collapsed'
He handed over the money and was told to collect the reimbursement on the following Monday, his birthday.
But when he got there, he was told that Schembri had fled the island.
“I fainted. I collapsed,” recalled Difesa.
“You seem to recall how much you invested but cannot recall how much you got back,” asked Montalto.
It was no more than €150,000 over two years, the witness insisted.
Asked why he had held onto the uncashed cheques for so long, Difesa replied, “I believed in his project… I’m still waiting.”
The case, presided over by magistrate Donatella Frendo Dimech, continues in July.
AG lawyers Karl Muscat and Francesco Refalo assisted prosecuting inspector Anthony Scerri.Lawyer José Herrera assisted Difesa. Lawyer Ian Vella Galea also appeared parte civile.