Updated at 8.45am: adds Keith Schembri's statement
Anti-money-laundering investigators in the British Virgin Islands (BVI) have probed Keith Schembri’s offshore company Colson, which in 2014 held cash balances of $725,000, new documents show.
In a letter to Panama law firm Mossack Fonseca, the BVI’s Financial Investigation Unit (FIA) asked for information about Colson as part of its functions “in relation to the investigation of a financial offence, including money laundering”.
The Prime Minister’s chief of staff is facing a number of money-laundering investigations locally, but the Prime Minister has dismissed calls for his resignation.
Ownership of Colson only made known thanks to Panama Papers
The BVI FIA asked for information on Mr Schembri’s company in April 2016, according to new information obtained by German paper Süddeutsche Zeitung.
Mr Schembri’s shareholding in the BVI company was hidden from public view through the use of nominees. The UK this month announced a plan to crack down on the use of anonymous companies in its overseas territories.
Mr Schembri’s ownership of Colson was only made known thanks to the April 2016 Panama Papers data leak.
Information shows how the now defunct Mossack Fonseca handed over information about Colson to the FIA, confirming that the offshore company was owned by Mr Schembri.
The Prime Minister’s chief of staff did not reply to questions from the Times of Malta asking if his financial interests in the BVI company had been declared to local tax authorities prior to the leak.
Mr Schembri failed to declare his New Zealand trust and Panama company to the tax authorities – an “oversight” he blamed on his financial advisers Nexia BT.
The FIA’s request for information was part of a wider inquiry it made into all BVI companies owned by Nexia BT clients.
In the same request, investigators asked for information about the BVI companies owned by Nexia BT managing partner Brian Tonna, Mr Schembri’s business partner Malcolm Scerri and former Allied Newspapers managing director Adrian Hillman.
The Panama Papers leak showed Mr Tonna’s company Willerby held €216,000 in 2014. This offshore company was set up to receive payments from rich individuals buying Maltese passports through Nexia BT.
A leaked report by the government’s anti-money-laundering agency (the FIAU) traced two payments from Willerby totalling €100,000 to Mr Schembri’s Pilatus Bank account, in what investigators suspect was a kickback.
FIAU suspects payments to Lester to be a case of money laundering
Malcolm Scerri was shown to have $1.1 million in cash assets through his offshore company, Selson, while Mr Hillman held $647,000 offshore through Lester Holdings. The FIAU found the payments to Lester originated from Mr Schembri. The payments from the Prime Minister’s chief of staff were passed through a web of offshore companies and accounts, in what the FIAU suspects was a case of money laundering.
Mr Schembri and Mr Hillman are facing a magisterial inquiry after the report was leaked in 2017. Mr Schembri is also facing a separate inquiry into passport kickbacks claims, together with Mr Tonna, his auditor.
All four men are resisting a wider investigation into their Panama Papers dealings requested by former PN leader Simon Busuttil.
Magistrate Ian Farrugia last year upheld a request for the investigation, but the four men, along with Prime Minister Joseph Muscat, Tourism Minister Konrad Mizzi and Nexia BT partner Karl Cini, appealed.
Keith Schembri's statement
In a statement, Mr Schembri said the story was "mostly recycled" and that Colson had been incorporated years before his appointment as chief of staff.
This, he indicated, was confirmation that his company structures had a "commercial scope".
"As the story itself implies, the competent authorities have looked into my structures and affairs. According to your report, they found nothing to comment further about since then. In fact, this so-called two-year-old “probe” was not even brought to my attention," Mr Schembri said.
Mr Schembri said that was "the proper function of rule of law," as he lashed out at Times of Malta, accusing it of the "assumption of guilt by mere implication."
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