Police dragged their feet on a major money laundering case for several years, a court was told on Wednesday.
The compilation of evidence against More supermarkets boss Ryan Schembri began on Wednesday with the lead investigator testifying about years of inaction by his predecessors.
The owner of the defunct More supermarket chain was extradited from Scotland and brought to Malta last month to face charges of fraud and money laundering estimated to be in the tens of millions of euros.
He is pleading not guilty to the charges.
On Wednesday, financial crimes inspector Anthony Scerri said that police had known Schembri had fled Malta as early as 2014.
Although they had received a long list of complaints from multiple investors, there had been no attempt to bring him back to the island to face justice.
“For some reason, I cannot understand why the Malta police did nothing at the time,” he said.
Times of Malta exposed earlier this month how police only issued an international arrest warrant seven years after Schembri left the island.
On Wednesday, presiding magistrate Donatella Frendo Dimech insisted that a police officer responsible for the unit be brought in to testify on the apparent inaction.
At the time, the police unit responsible for investigating economic crimes had been headed by Assistant Police Commissioner Ian Abdilla.
Abdilla was sidelined in 2020 when police chief Angelo Gafà took over the running of the force.
He was then suspended on half-pay in 2021, shortly after the publication of a damning public inquiry into the assassination of Daphne Caruana Galizia, which raised concerns about the way major financial crime cases were being investigated.
Court hears how Schembri fled Malta
Meanwhile, the court on Wednesday also heard how Schembri had fled Malta at a moment’s notice “with only the clothes on his back”.
He allegedly told his wife at the time to pack, taking their Mercedes to the catamaran and travelling to Sicily.
One of Schembri's More supermarket outlets. File photo.From there they caught flights to Amsterdam and then went on to Dubai, flying to Australia and back to Dubai in quick succession.
Schembri travelled with his wife and son and paid for everything in cash.
He left his car at the Catania airport with his father sending a tow truck to collect it to sell it.
The car had been registered in Schembri’s mother’s name.
Inspector Scerri also detailed how Schembri had racked up huge debts from investors in his supermarket and food imports business.
He would allegedly give creditors cheques that would bounce or else encourage them to reinvest their profits.
The case was adjourned and will continue on June 20.
Live blog ends
11.53 am Thank you for having joined us for this live blog. We will have a summary of the court hearing available at the top of this article shortly.
Case adjourned
11.50 am Diane Bonello, a financial crimes investigator takes the stand briefly.
She presents evidence bags filled with Schembri’s electronic devices.
The AG lawyer asks if the defence will hand over passwords.
Montalto says he needs to have contact visits with his client first.
The current system is to communicate across Perspex via telephone and that is not enough, he says.
The magistrate minutes that she has no issue with the accused and his lawyer having face-to-face meetings.
That’s all for today. The case is adjourned to June 20.
Police must testify on years of inaction
11.45 am Herrera continues.
He asks about Adrian Agius’s statement to the police.
"Where the police already investigating when Agius claimed Schembri had moved €25million to Dubai?" He asks.
"Yes", the inspector replies.
"Then how come no arrest warrant had been issued?"
The inspector does not comment: “I cannot explain that. It wasn’t my job at the time.”
The magistrate wants answers. She asks for a list of officers who worked on the case since 2014.
Scerri names Daniel Zammit, Jonathan Ferris, Doriette Cuschieri and others from the former economic crimes unit.
“Those are the names I recall,” Scerri says.
The magistrate says that someone from that unit must be brought in to explain why nothing was done at the time.
Court orders search for Schembri's funds
11.40 am Jose' Herrera now steps in.
Herrera says that as parte civile his main interest is to safeguard assets to ensure his clients are repaid.
He asks about freezing and attachment orders, but the magistrate intervenes and tells him this is not the correct forum for such questions.
Moving on, Herrera asks the inspector whether he or his colleagues had run searches for assets held by Schembri and his family.
It’s the Asset Recovery Bureau that must handle that, the magistrate points out.
To this effect, the court orders the director of the ARB to carry out searches for funds or properties belonging to Schembri and his companies.
Moving money to Dubai?
11.35 am Dalli asks the inspector whether Schembri had some vice or addiction.
“Where did all that money, millions, go?” He asks.
The inspector says it seems Schembri had no notable vice - none that he had any knowledge of.
Dalli then says that Adrian Agius had mentioned, in his sworn statement to police, how Schembri had transferred €25million to a Dubai bank account.
On this, the inspector is tight-lipped and says Agius may possibly testify at a later stage.
Cooking the books
11.30 am Francois Dalli representing Darren Casha takes up questioning the inspector.
He asks about Adrian Agius and Casha.
“Was there any business between the two?”
“No,” says the inspector.
Scerri says Agius and Casha had both been guarantors for third parties and Agius was also a personal investor in his own capacity.
The lawyer then asks about the share transfer to Casha by Schembri.
The inspector says no one had suspected the supermarket was going bust because its sales were so healthy.
Casha later found out that many sales were going to Schembri’s own stores abroad.
“So were the books being cooked?” Asks Dalli.
“Yes, according to what Casha said,” the inspector replies.
Schembri claimed he was being robbed in Libya
11.25 am Scerri tells the court that Schembri claimed he had gone bust because his Libyan supermarket was being robbed.
“That was Ryan’s explanation. He said ‘at some point I lost control’,” the inspector said.
He goes on to tell the court that Schembri had not given a justifiable reason for his decision to leave Malta.
The AG lawyer asks whether he had filed a police report about the alleged threats against his safety, to which the inspector says he had not found any signs of this.
This brings Montalto's cross-examination to an end.
The Carmel Chircop connection
11.21 am This case has left more than just financial victims.
Slain lawyer Carmel Chircop was one of the investors in the supermarket chain.
Chircop, 51, was gunned down inside a garage complex in Birkirkara on a Thursday morning in October 2015, as he was heading to work.
Carmel Chircop. File photo.He was shot four times in the upper body and died on the spot.
Alleged Daphne Caruana Galizia hitman Vincent Muscat was given a presidential pardon for testimony on the case.
Adrian Agius is charged with commissioning the murder, while his associates Jamie Vella and George Degiorgio are accused of carrying out the hit.
Selling a watch for cash
11.20 am Inspector Scerri tells the court that Schembri may say he planned on paying his creditors, but nearly eight years had passed and he had shown no signs of doing so.
“And why travel in a roundabout way to get to Dubai?” the inspector asks.
Schembri was no longer strapped for cash as he had been when he first fled Malta.
Inspector Scerri says Schembri had been so hard for cash that he had even sold his watch to get his hands on some quick money.
This was no longer the case, he says.
‘The final ugly chapter’
11.15 am Montalto tells the court it wasn’t always so bad for the investors in the supermarket chain.
“We’re here analyzing the final ugly chapter but before that, there were nine pleasant chapters,” the lawyer says.
“That’s the subject of the complaints I have”, the inspector replies.
Montalto says that Schembri’s investors had earned money before things turned sour.
Some got bills of exchange and counter bills, the inspector says, prompting the lawyer to add that this was how they all made money.
“But they only complained when they didn’t get the money, they didn’t say anything when they earned money,” Montalto says.
The inspector concedes that this may well be the case.
Montalto then puts it to the inspector that Schembri had told police that there were fluctuations in his business and that he had always intended to pay creditors “in a few months” when he returned to Malta.
Investor money mingled with Schembri’s funds
11.10 am Asked about sums given to Schembri, the inspector says that Casha’s cheques were deposited into accounts held by a company called Food World Limited.
The funds were used to purchase products but got mixed up with other funds belonging to Schembri.
The inspector says that Schembri would meet creditors, entice them to give him money to invest in his business, promising them handsome profits.
Some got cheques upfront but those regularly bounced.
Schembri would meet investors and convince them to reinvest their earnings.
In one episode, an investor had wanted their money back and Schembri allegedly told him to come to Dubai for the money in cash.
Schembri later promised a bank transfer but that never took place either.
What about the ‘Sorriso’ label?
11.02 am Scerri is asked about the label ‘Sorriso’ that was put on imported products destined for the Maltese market.
The inspector says that Schembri would take Casha and other business associates to foreign fairs to learn about the products.
Casha’s problem was that he would see those products abroad but they would not materialize on the supermarket shelves in Malta.
“But was it only Schembri and Casha involved?” the lawyer asks.
The inspector says it was only Casha who mentioned the Sorriso label.
The court is still somewhat in the dark about the relevance of this label.
Schembri blamed Casha for mismanagement
10.58 am Montalto asks about the issue between Schembri and Casha.
Schembri missed out on payments of debts and so offered to transfer his “best asset” namely his supermarket shares, the inspector says.
However, Casha said that those shares were essentially worthless.
Schembri disagreed and told police that he could not understand how after transferring his shares, Casha was still unable to pay off creditors.
Schembri blamed that on mismanagement by Casha.
The lawyer says the transfer of the business was done after it was all approved by auditors.
The inspector says that Casha claimed that it was all fictitious and he only realised afterwards
“And the renowned auditors didn’t?” the lawyer quips back.
Police still finding new creditors
10.50 am Lawyers Francois Dalli and Jose' Herrera (yes, the former minister) have joined the group of parte civile lawyers
Montalto asks about Schembri’s creditors.
Scerri says he and a fellow inspector George Frendo had investigated the complaints.
Investigators in the past did not seem to have delved deep into the claims by Adrian Agius.
The court charges against Schembri are based on complaints made by others, the inspector says.
He also adds that he also recently got to know about two other creditors, new ones that are not listed in this case.
Cross-examination begins and a threat of violence
10.44 am Scerri ends his testimony. But Roberto Montalto for the defence has questions in cross-examination.
On Schembri’s movements, is it a state of fact that he moved to England in 2017? He asks. Yes, says the inspector.
The inspector says that Schembri had a Maltese passport which he was still using at the time of his arrest.
"So there were no false documents then?"
“No,” says the inspector.
"And he lived in London? He wasn’t hiding under some false identity?" the lawyer asks.
Inspector Scerri says he gave UK police his full name when arrested.
The inspector goes on to say that Schembri claimed that when he left Malta he feared for his and his family’s safety.
So the inspector found it strange how he had remained abroad when his wife and child had travelled back to Malta.
Montalto says it was Schembri’s ex-wife who had chosen to return to Malta as she had not wanted to continue living that way.
The inspector says that some people had threatened to do “certain things” to Schembri’s son when he reached age 18.
Scerri however says that he found it rather strange that Ryan remained abroad, living “rather openly”.
No questions were asked
10.35 am Questions are raised by the magistrate about how long Schembri had been living in the UK.
The inspector says he had moved to UK from Dubai in 2017.
It could be that Schembri had done some other travelling but the UK appears to have been his primary place of residence since 2017.
Intelligence on Schembri emerged when Scerri took over the case.
All there was in the police file in 2017 was that he had travelled from Dubai to England but the police had done nothing, no questions appear to have been asked, Inspector Scerri says.
The magistrate asks whether the criminal complaints had already been filed, to which the inspector nods in the affirmative - “yes”.
Left with just the clothes on his back
10.30 am Schembri told police that he first realised that his business was going wrong around November 2014 but he claimed that he had been in that situation before and hoped to pay his creditors.
He left Malta “with the just clothes on his back” and had nothing. Schembri got a job to support his wife and son.
Schembri said that he had two companies, one in Seychelles and another in England. To date, police had no information on the Seychelles company.
Scottish police had seized electronic equipment from Schembri under a warrant.
That equipment is presented in court.
Ryan had been in Scotland for about a month before his arrest and had been staying in a property owned by his partner’s mother.
Scerri later clarified that Schembri was staying in rented property in Scotland.
The property he had in England belonged to his partner’s mother.
'I always wanted to pay them back'
10.25 am In Malta, Schembri was interrogated and claimed that “this was just business gone wrong”, the court is told.
Inspector Scerri says Schembri told investigators that he always intended to pay his creditors.
He said he was working on a “big project since 2015” specifically to be able to pay his creditors.
Police tried to get data from his mobile phone on this but he had refused to hand over his password claiming it contained sensitive data.
Both the magistrate and AG lawyer ask whether Schembri had informed his creditors of this project.
“He told me that he had not,” Scerri replies.
‘Malta police did nothing about Schembri’
10.19 am Inspector Scerri tells the court that in 2017 UK police had informed the Maltese police that Ryan had travelled from Dubai to the UK but “for some reason, I cannot understand why the Malta police did nothing at the time.”
Earlier this month, Times of Malta exposed how it took police seven years to finally issue an arrest warrant for Schembri.
Scerri’s testimony on this point prompts the magistrate to intervene.
She asks who had received that communication from the UK and what had happened.
The magistrate says she wants to see the police file and all the information related to this matter.
Scerri goes on to explain that between 2017 and his taking over the case in 2020 quite some time had elapsed.
When he was in charge of the investigation he had received information about a speeding ticket Schembri got in UK.
Police followed that up with an international arrest warrant on April 11.
Ryan was arrested the following day by Scottish police.
Two sittings followed before Scottish courts before he was extradited to Malta.
Adrian Agius tal Maksar and huge debts
10.06 am The inspector tells the court about the involvement of alleged organised criminal Adrian Agius known as tal Maksar.
(You can read a Times of Malta and MaltaToday joint investigation into the Maksar crime gang here.)
Adrian Agius. File photo.The court is told that Agius was in business with Schembri and brought in huge sums of investment from third parties.
Agius claimed he was left to pick up the pieces when Schembri fled and had to hand over property and cars to settle creditors’ claims
Agius claims the amounts due ranged from €2.4 million to €3.4million and another claim of a further €3million.
Escape by catamaran and flights around the world
10 am Inspector Scerri tells the court that police had spoken to Schembri’s wife who gave them details of how they fled the country.
She claimed that one September day, Schembri had told her to pack up her things because they were leaving the next day.
She said that he seemed “scared and worked up”.
They drove their Mercedes to the catamaran and went to Sicily, and from there caught flights to Amsterdam.
They then went on to Dubai, flying to Australia and back to Dubai in quick succession.
Schembri travelled with his wife and son and paid for everything in cash.
He left his car at the Catania airport with his father sending a tow truck to collect it to sell it. The car had been registered in Schembri’s mother’s name.
More than €1million on cooling system
9.55 am The list of complaints against Schembri is getting even longer.
Inspector Scerri says yet another complaint, this time by Christian Delia, was also made in court.
He was allegedly lured in to invest in the supermarket cooling system, forking out more than €1 million.
The court is told that Delia had originally given Schembri two cheques, representing an initial investment of €780,000.
But Schembri would allegedly meet Delia with hefty sums of cash in hand, claiming they were profits.
He would then convince Delia to reinvest those sums rather than take them as repayment. This led to Schembri’s debts ballooning even further.
International arrest warrant leads to list of creditors
9.50 am Inspector Scerri tells the court that while an international arrest warrant for Schembri was being prepared, he came across another criminal complaint by a certain Steve Delia.
Delia had handed €115,000 to Schembri part in cash and part in cheques.
Schembri had allegedly paid him back €109,000 through a Banif bank cheque in June 2014 but this had bounced.
A complaint was filed in court in October 2014 and then the police found another complaint was made by Etienne Cassar.
This complaint alleged that Schembri was acting behind his back, in the name of their company Cassar and Schembri.
Yet another creditor, Ian Azzopardi, claimed he had handed Schembri €100,000 and €50,000.
Schembri had signed two bills of exchange on these sums but those were worthless because “there just wasn’t any money”, the court is told.
No products or property
9.45 am Casha claimed with police that when creditors started calling for payment, he found that all products held as stock was hit by debts and the company did not even own any brick and mortar property.
‘All he left me was the More shop sign’
9.38 am The inspector says that Casha had told the police that he and Schembri had visited an auditing firm with Schembri giving a presentation on the company’s turnover and accounts.
Schembri managed to convince auditors, Casha claimed.
But when Schembri fled Malta, Casha was faced with a list of angry creditors.
According to Casha, all that Schembri left him was “the More shop sign”.
Handwritten diary notes and 'fictitious' invoices
9.32 am Casha said that he would write "diary notes" whenever he met with Schembri.
Casha handed these handwritten notes to the police along with invoices Schembri had given him, purportedly from foreign companies.
According to Casha those invoices were fictitious.
Some of the products in these invoices would come to Malta but not the more expensive ones, Casha told the police.
The inspector says that Casha claimed to have seen some consignments of cheap water but other products like expensive wines and spirits had never materialized.
A meeting in Libya
9.29 am The court is told that Casha and Schembri had met in Libya and agreed to team up in the meat and food importation business.
They were joined by a certain Mohammed who had a company called “Copacobana”.
Casha had handed over corporate documents to the police which the inspector presents to the court.
The papers focus on food, drinks and other products they were to import and sell in Malta.
These were labelled by Schembri as “Sorriso”.
Schembri subject of ‘blue notice’
9.21 am Inspector Scerri presents two of Casha's complaints and a copy of a commercial agreement.
In June 2013 Casha had stepped in as a guarantor for a third party Adrian Zammit who had handed over €2million to Schembri in the form of cheques for a meat imports business venture.
The inspector also spoke to Schembri’s employees who confirmed that their former boss would direct them to deposit these cheques.
Casha had also stood in for another creditor, the court is told.
After Casha’s complaints, the police issued what is known as a blue notice against Schembri.
A blue notice is used to alert investigators of a person’s movements overseas.
‘Millions in fraud’
9.15 am Inspector Scerri takes the witness stand first.
He says that in November 2020 he took over the case and was handed a file with three complaints by Darren Casha.
Casha had claimed that Schembri had committed fraud to the tune of millions of Euros.
Background: Casha had taken over the sinking chain, and claimed in a 2016 judicial protest that Schembri had fooled him into making the investment and that the accounts he had been shown were “mistaken and far from the truth”.
Schembri enters a packed hall
9.10 am Schembri is escorted into the courtroom by armed guards. He is in a grey chequered suit, white shirt and red tie.
The hall is getting crowded as other lawyers interested in the case cram their way in.
They include lawyer Ian Vella Galea for Christian and Steve Delia who are parte civile in the case, and lawyer Alex Miruzzi for Thomas Gravina, who is also claiming be an injured party.
Who are the main players?
9.05 am Magistrate Donatella Frendo Dimech will be presiding over the compilation.
The prosecution will be led by police inspector Anthony Scerri of the Financial Crimes Investigation Department and lawyer from the Attorney General’s office Karl Muscat.
Roberto Montalto is appearing for the defence.