A court heard allegations of fake documents, false accounting and tax evasion by two companies linked to the business dealings of former OPM chief of staff Keith Schembri. 

The senior management of auditing firm Nexia BT and financial services company Zenith were in court on Thursday as the prosecution laid out the case against them.

It was the first hearing in a compilation of evidence against a series of people and businesses charged with major financial crimes

Magistrate Donatella Frendo Dimech began proceedings with controversial firm Nexia BT, the auditors for all of Schembri's companies, who were exposed in the 2016 Panama Papers leak as setting up offshore structures for people in power.

Its managing director Brian Tonna, along with Karl Cini, Katrin Bondin Carter and Manuel Castagna all deny money laundering and other serious financial crimes.

Later, the case turned to financial services company Zenith, formerly known as MFSP. Its executive director Matthew Pace and managing director Lorraine Falzon are accused of money laundering and forging documents.

The case against Nexia BT heard how:

  • A magisterial inquiry into payments equalling €100,000 from Brian Tonna to Keith Schembri found "not credible" claims that they were loan repayments linked to Tonna's marriage breakdown;
  • Police found Nexia BT's Katrin Bondin Carter and Karl Cini created backdated documents including a loan agreement to "mislead investigations";
  • Police found evidence of false accounting and tax evasion with the way a company called Willerby, owned by Tonna but named after the three Nexia BT directors, received funds linked to Malta's passport scheme;
  • Tonna had more than €642,000 in various banks and companies, showing that claims he needed a loan from Schembri did not make sense;
  • Nexia BT staff were given 'top-up' payments by cash that did not appear in any of the company's accounts;
  • Nexia BT was linked to a second magisterial inquiry, into dealings between Schembri and former Allied Newspapers managing director, Adrian Hillman;
  • Schembri told police Nexia BT helped him with invoicing in connection with a machine Kasco Engineering bought through offshore companies from the
  • US for Allied Newspapers. He claims all tax was paid when it arrived in Malta;
  • The accountancy board removed Brian Tonna's accountancy warrant after his arrest, but returned it three days later, he told police;

The case against Zenith, formerly known as MFSP, heard police claim that:

  • Some €650,000 was paid between Schembri and Hillman through MFSP, after both opened accounts with the company in 2010;
  • Vincent Buhagiar, a former managing director of Allied Newspapers, also opened an account in 2011 and the first payment was $134,000 from Schembri's Swiss account;
  • Funds were passed into the company through Credit Suisse and a bank in Gibraltar but were listed as 'third party transfers' with no details on their provenance;
  • MFSP did not carry out proper compliance but acted "as a professional money launderer";
  • Executive director Matthew Pace was complicit with Tonna in producing documents covering six financial transactions manufactured to show the funds were from legitimate avenues;
  • A magisterial inquiry into the dealings between Hillman and Schembri found Pace and MFSP's managing director Lorraine Falzon should be prosecuted for falsification of documents and money laundering;
  • Falzon "did not scrutinise the transactions as she should have" as compliance officer.

LIVE BLOG


Hearing concludes

3pm And with that, today's hearing ends. Thank you for joining us over the last six hours. 

We'll have a summary of today's case above shortly.  


Bail decree Friday morning

2.56pm As lawyers for the defence and attorney general continue to discuss the case, the magistrate asks whether the gist of the case against the two accused is the fabrication of documents and lack of compliance. The prosecution says it is. 

The magistrate says bail will be decided tomorrow morning. 


'Fear of tampering with the course of justice'

2.44pm The Attorney General's lawyer continues by saying that even if they knew they were being investigated, their status has changed from a person being investigated and a person who's been charged with criminal offences.

"We're not saying there's fear of tampering with evience but tampering with the course of justice," she argues, citing that as the biggest concern. "There's an investigation that's still under way."


Attorney General objects

2.38pm Elaine Mercieca Rizzo from the Attorney General's office replies. They are still objecting because it is at the very beginning of proceedings, she says. 

The charges started in 2010 but continued until 2020.


Custody 'nonsensical'

2.29pm Defence lawyer Edward Gatt says they have "enormous difficulty" understanding why Pace and Falzon have been in jail since last Saturday.

Apart from these documents allegedly prepared by Pace and signed by Tonna, there's nothing else, he tells the court. 

He also claims the inspector is finding it difficult to "justify" the charges that have been issued. 

He points out that FIAU regulations were introduced in May 2011 and the client relationships started between 2010 and February 2011.

"The alleged crimes happened in 2010 and 2011, so there's no fear of tampering with the evidence".

Their families are in Malta, and so are all their links, he continues. 

"It's nonsensical that we're expecting them to do something they have not done in 11 years," he adds. 


Bail request

2.26pm A request for bail for Falzon and Pace is being discussed. Defence says accused cooperated with the police and there is no risk of absconding. 

The evidence is mostly documented evidence. Mercieca from Attorney General's office acknowledges that police bail was always respected in the case of the accused. 


Funds from Gibraltar and Switzerland

2.23pm in 2013, after Schembri became a PEP, there was no further due diligence. The form that was used did not include FIAU risk factors.

On the funds between between Schembri and Hillman, even though from Gibraltar and Switzerland, they were listed as third party transfers without any details on where they came from. 


€5,500-a-month salary

2.19pm We're back and Inspector Leanne Bonnello is on the stand. She reveals Lorraine Falzon was getting €5,500 net a month as a salary.


10-minute break

2.01pm Cross-examination is suspended while the court takes a short break. 


Schembri becomes PEP

1.44pm After 2013, when Labour won the election and Schembri became a politically exposed person through his position as OPM chief of staff, Zenith carried out a review of his status. 

They did a second risk assessment covering and raised him to 'medium to high risk' customer, Camilleri explains.  

He said there were no further funds transferred to his account after he became a politically exposed person. 


Media ban

1.53pm The court issues the second media ban of the day. This one on names and designations of people who are still under investigation as a police investigation is still under way. 


Dealings 'not legitimate'

1.48pm Lawyer Mark Vassallo asks what was wrong with Pace writing a letter for Brian Tonna to sign.

Camilleri says it raised suspicions that he knew dealings were not legitimate.


1.43pm Inspector Camilleri said he based his investigation on the conclusions of experts involved in the magisterial inquiry. 

Police did not have access to MFSP's client profiles, but experts appointed by the inquiring magistrate did. 


Falzon 'did not do her job'

1.41pm Inspector Camilleri said Falon was not checking documentation given to her by Pace. For example, police found an email for documentation two months after a transaction.

"She knew what was happening and did nothing about it," Camilleri tells the court. 


Money laundering requirements

1.33pm Camilleri is asked if he checked what money laundering requirements were in place at the time. He says there were different procedures, but there were still illegalities in this case. 

Risk assessments were not required at the time but they still carried them out. None of those involved were Politically Exposed Persons [it would be a few years before Keith Schembri would be elevated to the position of Prime Minister Joseph Muscat's chief of staff].

There were funds from Credit Suisse and a bank in Gibraltar. 

Asked for more details about the six transactions, mentioned earlier, Camilleri said compliance requirements were not followed. Falzon, as money laundering regulation officer, "did not scrutinise the transactions as she should have".


Cross examination

1.25pm Under cross examination by lawyer Mark Vassallo, Camilleri says Schembri and Hillman both became clients in June 2010.

Scerri came on board the following month and Buhagiar in February 11. 

There's a useful glossary of all these people here.


Compliance 'over and above'

1.24pm Falzon told police it was irrelevant that documentation was prepared by Pace, as long as it was signed by auditors Nexia BT.

Her compliance, she said was "over and above" what was required of her and she saw nothing wrong with the transactions. Her last statement was on March 20.

Keith Schembri became a client of MFSP in June 2010.

MFSP and Zenith are one and the same - MFSP rebranded to Zenith. 


Schembri and Hillman 'low risk'

1.20pm Falzon explained how she assessed due diligence in categories of low, medium and high risk.

Hillman and Schembri were "low to medium risk". At the time, Schembri was not in the public eye and provided financial statements to prove his financial position. 

Scerri, Hillman, Buhagiar and Scherri were all clients of Pace.

She said when media reports starting emerging, they were told not to reply to media questions.


Lorraine Falzon called in

1.16pm Police questioned Lorraine Falzon on March 18, after police issued an arrest warrant. She said she joined MFSP in 2001 and was exclusively responsible for compliance. 

Schembri, Hillman and Scerri, via Nexia BT, opened up “investment accounts” at MFSP for their offshore BVI companies.


'Compliance was different'

1.13pm Pace was released on police bail and interrogated again on March 12. He was asked how new clients were being sought. 

He said Hillman was introduced by Schembri and they said they were going to do consultancy work. Pace said that in 2008 the compliance was different.

On March 20, he was interrogated again and given documentation, including an invoice between Schembri and Hillman. Pace did not reply to any questions.


Pace statements

1.09pm Pace made his first statements to police on March 7. He was asked about his financial position and documentation, including emails.

He prepared a list of payments.

Nexia BT was the auditing company of both Kasco and MFSP. 

Buhagiar was not a client of Nexia BT so police found it strange how Brian Tonna was preparing documentation involving him.

Pace said he could not remember specifics.

He said Brian Tonna referred Schembri as a client. Schembri had then referred Scerri, Hillman and Buhagiar.


Falsification of documents and money laundering

1.07pm In the Hillman inquiry, the magistrate concluded that Lorraine falzon and Matthew Pace had to be prosecuted for falsification of documents and money laundering.


Payments between Schembri and Hillman

1.05pm Schembri opened an MFSP account in May 2010 and Hillman in June 2010 and was given $170,000 US from Schembri's Swiss account. 

Buhagiar opened an account in February 2011 and the first payments came from Schembri for $134,000. 

Hillman's Lester account was opened in December 2011.


'Professional money launderer'

12.53pm Police inspector Ian Camilleri, of the anti-money laundering unit, FCID testifies. 

In the first week of March this year, he says police were assigned to 'operation MH'.

They found €650,000 paid between Schembri and Hillman through investment company MFSP, which was being reinvested.

He said there were three machines bought by Kasco Engineering and Progress Press. The money was sent to the US to pay for the machine.

The magistrate ordered a search of MFSP and seized copies of servers and laptos. Schembri, Hillman, Vincent Buhagiar and Malcolm Scerri were all investigated as was Lester Holdings, owned by Hillman.

Pace did not do proper compliance but worked around it "as a professional money launderer", Camilleri told the court.

He said he was complicit with Tonna in producing documents to show the funds were coming from legitimate avenues. They saw nothing wrong with documentation prepared by MFSP and sent to Nexia to be printed on a Nexia letterhead. 

The documentation covered six transactions in total. 


Matthew Pace, right, director of Zenith, pictured on Saturday. Photo: Matthew MirabelliMatthew Pace, right, director of Zenith, pictured on Saturday. Photo: Matthew Mirabelli


12.47 pm We're back, this time with the case against financial services firm Zenith.

Its executive director Matthew Pace and managing director Lorraine Falzon have taken their seats in the dock.

They are both charged with money-laundering, criminal conspiracy, making false declarations to a public authority and accountancy law breaches.

Lawyers Edward Gatt and Mark Vassallo are appearing for the defence. The prosecution lawyers remain the same.


Here's a brief summary of what we've heard so far today:

The prosecution outlined their case against Nexia BT.

  • A magisterial inquiry into payments equalling €100,000 from Brian Tonna to Keith Schembri found "not credible" claims that they were loan repayments linked to Tonna's marriage breakdown;
  • Police found Nexia BT's Katrin Bondin Carter and Karl Cini created backdated documents including a loan agreement to "mislead investigations";
  • Police found evidence of false accounting and tax evasion with the way a company called Willerby, owned by Tonna but named after the three Nexia BT directors, received funds linked to Malta's passport scheme;
  • Tonna had more than €642,000 in various banks and companies, showing that claims he needed a loan from Schembri did not make sense;
  • Nexia BT staff were given 'top-up' payments by cash that did not appear in any of the company's accounts;
  • Nexia BT was linked to a second magisterial inquiry, into dealings between Schembri and former Allied Newspapers managing director, Adrian Hillman;
  • Schembri told police Nexia BT helped him with invoicing in connection with a machine Kasco Engineering bought through offshore companies from the US for Allied Newspapers. He claims all tax was paid when it arrived in Malta;
  • The accountancy board removed Brian Tonna's accountancy warrant after his arrest, but returned it three days later, he told police;
    Nexia BT consultants (l-r): Managing partner Brian Tonna, Manuel Castagna, Karl Cini, Katrin Carter BondinNexia BT consultants (l-r): Managing partner Brian Tonna, Manuel Castagna, Karl Cini, Katrin Carter Bondin

Change of plans

12.01pm Defence lawyers will instead make bail submissions next week. The case against these four will continue on Tuesday at 10.30am.

But we're not finished for the day. In about half an hour, the magistrate will hear the prosecution's case against financial services firm Zenith, and its directors Matthew Pace and Lorraine Falzon. 


Bail requests

11.52am The court is discussing bail requests now. Remember ten of the 11 people accused of financial crime were remanded in custody on Saturday. Since then, they've been in Corradino Correctional Facility. 


Inspector's testimony ends

11.49am At this stage Keith Schembri had refused to answer any quetions because of the possibility that he was going to be charged.

And with that, Inspector Anne Marie Xuereb's testimony ends. 


Centripp

11.43am Cini was called in again, given documentation, but again refused to answer questions. Castagna was called in, given documentation, and confirmed he had a card in the name of a company called Centripp which was linked to Willerby. He used this card to pay his expenses.

On March 20, Tonna was called in again, but again said he needed more time, as did Cini and Castagna. 


Payments to Schembri's father

11.34am Police found an email between Kasco's financial controller Robert Zammit and Brian Tonna regarding payments. They would be paid to his father but Keith Schembri said those were donations from his father.

Tonna was called in again on March 18 and again said he was shocked to be implicated in the Hillman inquiry. 

He said he was busy because Nexia had to move offices and asked for more time to see documentation. 

Shown an agreement between Nexia on one side and Keith and Hillman on the other side, Tonna said he was not involved in the purchasing of the machines.


Blind trust

11.29am Tonna was called back in later that day and he asked for more time to check the documentation he was being given. Cini was called back in and he too asked for more time to check the documents. Castagna referred to previous statements but was evasive in his replies, saying he could not remember details.

Asked if he spoke to partners about allegations leaked by the press, he said he asked them and was told that nothing wrong was being done. It was clear that he was not comfortable answering questions so his lawyer asked for the statement to be postponed so he could speak to his client. He then asked for more time to check documentation.

On March 15, Schembri was called back in and said he paid his auditors to take care of everything as "he trusted them with his eyes closed", Xuereb tells the court. 


Nexia BT's involvement

11.28am On invoicing, Schembri said he spoke to Nexia BT and they came up with an invoicing system. Kasco Engineering bought the machine through offshore companies for tax purposes because the machine was being bought from the US. All tax was paid when the machine arrived in Malta.


Buying a printing press

11.24am Schembri told police that Progress Press wanted to buy a machine and decided to go to the Financial Times in Brussels to see what machine was needed.  

The process to buy the machine was audited by auditors PricewaterhouseCoopers (PwC). 

Allied Newspapers needed to use the St Paul Street premises as a guarantor for the investment in the machine, he said. 


Schembri on Hillman 

11.20am On March 11, Schembri was back at FCID. Like the others, he was given a copy of the inquiry conclusions and asked about deals with Progress Press. 

Schembri said he had been working with Hillman since 2001 and saw him as "a valid person".

Schembri, whose company supplies paper, said he used to quote for the paper used by Progress Press.

His quotes were never accepted. Then some board directors changed and he started supplying paper, he told police. 


Castagna refuses to answer

11.15am Manuel Castagna was interrogated next. He, too, was given a copy of the inquiry conclusions. He refused to reply to any questions. 

He was asked about deals with Progress Press and the deals behind them. He refused to answer questions. 


Another surprise

11.13am Karl Cini was interrogated again on March 7 and given a copy of the conclusions of the Hillman inquiry. He refused to reply to any question. 

But, like Tonna, he was surprised that he was implicated in this inquiry too. 


Schembri 'nothing to add'

11.10am We're back.

Inspector Xuereb now tells the court that Keith Schembri referred police to his testimony before the inquiring magistrate, confirmed that Nexia BT were the auditors of all his companies but said he had nothing more to add.


Short break

10.56am We're on a ten-minute break. We'll be back soon.   


Brian Tonna, left, with Katrin Bondin Carter beside him and Karl Cini in the rear, being driven to Corradino Correctional Facility, after being charged with financial crime on Saturday.Brian Tonna, left, with Katrin Bondin Carter beside him and Karl Cini in the rear, being driven to Corradino Correctional Facility, after being charged with financial crime on Saturday.


Hillman inquiry

10.43am In the meantime, another inquiry was concluded: into dealings between former Allied Newspapers managing director, Adrian Hillman and Keith Schembri.

On March 7, 2021 Cini, Tonna and Castagna were arrested and given redacted conclusions of the magisterial inquiry.

Tonna was very surprised about the Hillman inquiry becaue he did not know he was involved in this inquiry too.


Tonna arrested again

10.37am Tonna was arrested again earlier this month. This time he gave the police four emails regarding questions made by the police in previous interrogations.

The accountancy board had taken his warrant but it was given back to him three days later. The attachment orders had almost forced them to shut the business, he told police. 

On the backdated document, Tonna said this was done for compliance purposes. 
On a loan application from Pilatus, he said he did not take the loan because they closed the Willerby account and this was shared among the three partners. 

He said he had wanted the loan just in case he came across a good property deal.

On the transfer to Schembri's Pilatus account, Tonna said the amount was reduced from his share in Willerby. 

On cash top ups to staff, Tonna said he was not aware.


Karl Cini opens up

10.32am Earlier this month, Cini was asked about previous documents. He confirmed he created a number of invoices.

Regarding a note of a meeting the day after the creation of Willerby (in 2013) but which was created three years later (in 2016), Cini told the police to ask who asked for the document.

Platus had asked for several documents to confirm transactions and that was why they were backdated, some by four years, he said. 

Three partners asked Pilatus for a loan of €200,000 each. Cini said he needed it to buy the place where he lives. He also had a loan with BOV to finish the property

Cini said Tonna never mentioned cash problems. On the €100,000 payment from Willerby, Cini said he explained this to the inquiring magistrate and he did not feel he needed to say anything else.


Memory failure

10.27am Back to the case. Caroline Tonna, Brian Tonna's ex wife was also interrogated by police. She was assisting with payroll but insisted she could not remember anything. Tonna's PA, Caroline Dingli also could not remember anything when asked about documents. She always insisted she acted on Tonna's instructions. 

She only learned about the existence of Willerby in the media. Asked if she had access to bank accounts, she said she usually had internet banking dongles but would return them to Brian Tonna as soon as she is done with what Tonna would have asked her to do.


Meanwhile in Hall 22

10.25am It's a busy day in court. Over in Hall 22, the compilation of evidence against Yorgen Fenech is continuing. He is accused of masterminding the murder of anti-corruption journalist Daphne Caruana Galizia.

Our colleagues Edwina Brincat and Herman Grech are keeping you up to date with the latest on that case. 


Katrin Bondin Carter

10.18am On Febuary 26, 2021 police interrogated Katrin Bondin Carter. Asked about the email from Nexia BT's auditor, she explained that it was normal for the auditor to ask for clarifications. She knew about the company Willerby and that it was Tonna's but Cini took care of the accounts, she told police. 

She said she was acting upon instructions of the partners, including how she replied to emails and that she always discussed everything with the partners.

About her salary, she said the cash was usually linked to leave that was unutilised. However, when police insisted that this was a top up to the wage, she refused to reply.


More questions, no answers

10.14am Tonna was questioned again - this time about emails showing employees were being paid by cheque with cash top ups. Again he refused to answer any questions. 

Karl Cini followed suit when asked about the same emails. Castagna, too, remained silent.


Silence

10.09am Brian Tonna was the first to be interrogated but did not reply to any questions. Castagna did the same. Cini was arrested again on December 9 2020. Even he refused to answer any questions. 


Nexia BT bosses react

After the arrest, each Nexia BT partner reacted differently:

  • Manuel Castagna released a statement on September 22. He said he was an auditor with Nexia BT and a director of various companies. He was shown a loan agreement between Tonna and Schembri and said he had "never seen" it and "never saw anything illegal happening". He did not reply to other questions.
  • Karl Cini was arrested and released a statement later that day. He said he had worked as an accountant for Nexia for 20 years. He did not reply to any questions.
  • Brian Tonna was arrested too. He was asked about his links to Keith Schembri, Castagna and Cini, about tranfers of money, about the loan agreement and whether Castagna and Cini knew of this loan. He did not reply to any questions. 

They were all released on police bail and the next statement was taken on December 20.


Keith Schembri arrest

09.56am Turning to the arrests. Keith Schembri was arrested on September 21, 2020 from his Mellie─ža home. Police searched his house and found two iPhones, various iPads and several USBs. 

Police also searched 3 Cities Design in Cospicua and Kasco Group in Bulebel where they seized computers


Willerby 

09.54am Willerby's ultimate beneficial owner was Brian Tonna. The company was registerd in British Virgin Islands in 2013. Its directors were people from Mossack Fonseca - the notorious Panama Papers firm Tonna introduced to Malta. 


SPX services

09.47am We now move on to SPX services, incorporated in 2012, by Tonna, who told police it was created to transfer money "for a rainy day" following his separation.

In December 2014, there was an invoice by SPX for due diligence services. the invoice for $150,000.

SPX services is one of several companies linked to Tonna that are accused of financial crime in this mammoth case. The others: Nexia BT, Nexia BT Limited, BT International Limited, Nexia BT Advisory Services Limited, BTI Services Limited, SPX and Willerby Trading


€624,000 in the bank

09.44am Police found that Nexia employees were being paid an amount on which tax was being paid plus an amount of cash that was not appearing in any accounts.

Brian Tonna was paid in cheques and also cash for his work. He had more than €624,000 in Lombard Bank and also deposits in KBT Holdings and another company Zonqor.

This shows that the version of the loan from Schembri did not make sense, Xuereb suggested. 


Media ban

09.42am We have the first media ban of the morning.

The court orders a ban on the details of the relationship between Tonna and his ex-wife, Caroline, because the inspector is giving details about the separation.


False accounting and tax evasion

09.35am Willerby received referral commissions for IIP applications [IIP was Malta's highly-controversial passport scheme] when BT International should have been in receipt of these commissions.

This showed false accounting and tax evasion, Xuereb tells the court. 

Experts assisting the inquiry concluded that Willerby was the recipient of funds in a way that the transfer of funds would not be transparent.


€84,000 cheque

09.31am Police found an email from Nexia BT's auditor Fiorentino in December 2015 asking about money showing as receivables from clients and asking for an explanation from Carter.

An €84,000 cheque deposited by Tonna was over a property sale, he said, which he  deposited in his account "for a rainy day". However in July 2011, Tonna said the amount was for receivables due to Nexia BT for consultancy payments.

He said the money was not from business but about a property sale that had not gone through in Ghaxaq.

Police found invoices issued by BT International and by Willerby for the same service.


Keith Schembri, pictured on Saturday, received payments totalling €100,000 from Brian Tonna. Photo: Matthew MirabelliKeith Schembri, pictured on Saturday, received payments totalling €100,000 from Brian Tonna. Photo: Matthew Mirabelli


Documents created post Panama

09.25am

The 'loan agreement' documents were only created following the Panama Papers leak. They were requested by [the now defunct] Pilatus bank following a visit from the government money-laundering agency, FIAU.

The documents were created by Carter on Cini's instructions, Xuereb told the court.  


Willerby

09.19am The two €50,000 payments to Schembri came from the account of a company called Willerby, which Tonna said was an "investment vehicle" to invest surplus profits by Nexia partners, and was in all three names.

If it was really a loan, Tonna could have paid it through the accounts both have in MFSP, the inspector commented. Tonna also had money in other accounts and even cash to pay back the loan without using Willerby.

It turned out that both Carter and Cini - the other Nexia BT partners - were working together to come up with backdated documents.

"These seemed to have been created to mislead investigations," Inspector Xuereb said. 


Subject: 'Loan agreement'

09.15am Police found an email, which Brian Tonna had sent to himself with the subject 'Loan Agreement'. Asked about such a document, Schembri said he did not remember, while Tonna said Pilatus had asked for documentation to prove the loan repayment of €50,000 each. . 


Two payments totalling €100,000

09.11am The magisterial inquiry found two payments for a total of 100,000 which Tonna and Schembri claimed were loan replayments.

Tonna explained that he had asked for a loan from Schembri because of marriage separation proceedings, which he borrowed in tranches of €20,000. 

There was no documentation about the loan "since they were friends".


No kickback

09.08am The magistrate concluded that there was no evidence of kickback to Keith Schembri, in connection with passport sales. 

The magistrate also decided that the story about a loan between Schembri and Tonna was not credible.

You can read more on that story here.


Prosecution testifies

09.03am Police inspector Anne Marie Xuereb takes the stand. She's stationed at the force's financial crimes department.

She describes how the investigation started in the first inquiry, regarding potential corruption by Brian Tonna and Keith Schembri on passport sales after request by former PN leader Simon Busuttil.

It started in May 2017, when it was assigned to Magistrate Natasha Galea Sciberras and was concluded in September 2020.


Freezing order

09.01am The prosecution begins by asking for financial watchdog MFSA to be notified about a freezing order on the companies. The defence doesn't object and the magistrate upholds the request. 


Courtroom players

08.47am Here are a few of the key people in court this morning.

  • In the dock are Brian Tonna, Karl Cini, Katrin Bondi Carter and Manuel Castagna - all from auditors Nexia BT;
  • Tonna's daughter, Beverley Tonna, is also here on behalf of KBT Holdings;
  • Lawyers Matthew Xuereb and Michael Scirha is representing Castagna; lawyers Franco Debono and Amadeus Cachia are here for Carter; Stephen Tonna Lowell is for Tonna and Cini; Giannella de Marco is for KBT Holdings;
  • The prosecuting lawyer is Elaine Mercieca, accompanied by Sean Scerri de Caro and Andrea Zammit from the Attorney General's office;
  • Superintendent Frank Anthony Tabone and Inspectors Joseph Xerri and Anne Marie Xuereb join the prosecution;
  • The magistrate, who has just walked in, is Donatella Frendo Dimech.

(No wonder we had to find a bigger court room)


Changing rooms

08.45am Lawyers have just complained Hall 9 is too small for safe social distancing. So we've moved to Hall 22. 


Who's Who

08.42 am While we're waiting in Hall 9 for proceedings to begin, you can familiarise yourself with the 11 people  accused of major financial crime.

This morning, the case will focus on four of these: the people at the top of Nexia BT, a controversial firm that helped set up the secret companies of former OPM chief of staff Keith Schembri and minister Konrad Mizzi. 

Schembri himself is the most high profile person to face charges. But you'll not see him today, as he is due up in court on Friday. 

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