The Financial Intelligence Analysis Unit had “reasonable suspicion” the Prime Minister’s chief of staff was involved in money laundering after he transferred hundreds of thousands of euros to the then managing director of the Allied Group, Adrian Hillman.
This is the second case involving Mr Schembri that the FIAU is now known to have flagged to the police for investigation following another report that he may have received kickbacks of some €100,000 in relation to Malta’s passport scheme.
But as in that case, no police investigation is known to have been conducted.
Read: Schembri and Hillman fail to explain business connection
This newspaper can reveal that last year, following the publication of the Panama Papers, the FIAU found “sufficient evidence to conclude a reasonable suspicion of money laundering and proceeds of crime” over the transfer of more than €650,000 from Mr Schembri to Mr Hillman in varying amounts and to different bank accounts.
The alleged crimes are now subject to a magisterial inquiry, since on Friday – as he did in the kickbacks case – Nationalist Party leader Simon Busuttil presented eight files of documents to an investigating magistrate.
Watch: Busuttil presents eight files of 'irrefutable evidence' against Schembri
He said the documents “leave no doubt that the Prime Minister’s chief of staff was involved in money laundering”.
The Police Commissioner is represented in the FIAU through Assistant Commissioner Silvio Valletta, who is the husband of Labour parliamentary secretary Justyne Caruana.
But no action was taken by the police on the suspicions flagged to them by the FIAU. Ironically, the police, through the head of the Economic Crimes Unit, Ian Abdilla, are assisting the inquiring magistrate in both probes.
He invested the funds a few days later in products like bonds
Documents seen by this newspaper show that despite not having any declared business activities in Malta apart from his job as managing director of the Allied Group, which also owns Progress Press, Mr Hillman received more than €650,000 in payments from Mr Schembri or companies controlled by him between 2011 and 2015. The payments were made into accounts held in Mr Hillman’s name or his British Virgin Island shell company, Lester Holdings Group Limited.
The investigation also shows that a few days after the receipt of these funds from Mr Schembri, Mr Hillman used a financial intermediary, MFSP Financial, to invest them into other financial products, particularly bonds.
In most instances, the money transferred from Mr Schembri or his companies was directly received into the client account held on behalf of Mr Hillman by MFSP Financial and managed personally by Matthew Pace – one of the intermediary’s shareholders.
FIAU investigators told the Police Commissioner that “from their review it is pertinent to note that both investment accounts of Mr Adrian Hillman and Lester Holdings Group Limited held with MFSP Financial were funded solely by Mr Keith Schembri or his companies.”
As managing director of the Allied Group, Mr Hillman was also chairman of Progress Press, where he presided over a multimillion-euro investment in a new state-of-the-art printing facility in Mrieħel. Mr Schembri’s Kasco Group, particularly Kasco Engineering, was entrusted with the procurement and installation of the printing facilities, which cost millions of euros.
A few weeks ago, the PN leader revealed Mr Schembri was suspected of receiving kickbacks of some €100,000 on the sale of Maltese passports. The funds were allegedly passed on to him in an account at Pilatus Bank by Nexia BT boss Brian Tonna through a BVI company.
Schembri, Hillman and Tonna have denied all these allegations.
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