A total of $1.6 million (€1.3 million) was transferred to 17 Black, a Dubai company listed as one of the "target clients" which would pay in money to Keith Schembri's and Konrad Mizzi's once-secret Panama companies, leaked documents show.
The men's financial advisers Nexia BT said in a newly leaked e-mail obtained by German paper Süddeutsche Zeitung that 17 Black would be paying in money to Mr Schembri's and Dr Mizzi's Panama companies Tillgate and Hearnville, via accounts they tried to open in the Bahamas.
These findings come as part of an investigation by more than 18 media organisations, including Times of Malta.
This collaboration, known as the Daphne Project, was coordinated by Forbidden Stories, a Paris-based group that continues the work of journalists silenced through murder or imprisonment.
Investigators from Malta's anti-money laundering agency (FIAU) traced two payments totalling $1.4 million (€1.1 million) to 17 Black, from a company in the Seychelles called Mayor Trans, according to a leaked report.
The Seychelles company is owned by an Azerbaijani national.
The $1.4 million was sent to 17 Black in November 2015, via ABLV, a Latvian bank recently closed down due to money laundering violations.
According to the report, obtained by the Daphne Project, US anti-money laundering authorities had identified transactions concerning 17 Black as possible "shell company activity, suspicious wire transfers and money laundering".
The slain journalist first made a cryptic reference to 17 Black in February 2017.
Analysis by the FIAU deemed the $1.4 million transaction as "suspicious" as it appeared to involve shell entities in high-risk jurisdictions.
The $1.4 million payment was listed as "advisory services", a generic term often used to move around funds of illicit origin, the FIAU said in its report.
At the time of the 17 Black transactions, Mr Schembri's and Dr Mizzi's financial advisers Nexia BT were trying to open up bank accounts all over the world for their Panama companies.
$200,000 payment by LNG tanker agent
Another $200,000 (€161,000) payment was sent to 17 Black by Orion Engineering, a company owned by Mario Pullicino, who is the local agent for the FSU unit feeding LNG to the new power station.
The FIAU also found the $200,000 payment in July 2015 by Orion Engineering to be suspicious, due to Mr Pullicino's links to the power station project.
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Replying to questions sent by Times of Malta on behalf of the Daphne Project, Mr Pullicino said he had nothing to add to his previous denial that Orion Engineering was involved in any payment of kickbacks linked to the LNG FSU.
Konrad Mizzi was still Energy Minister when the payment was made.
Times of Malta last year established through an FOI request that Dr Mizzi secretly travelled to Dubai a month after the payment.
Days before his Dubai visit, Nexia BT was gathering the necessary documents for him to open up a bank account there.
Dr Mizzi denies taking any documents with him on that Dubai trip or opening any such bank account.
The 110-page report into Dr Mizzi's financial dealings was leaked while the FIAU was still gathering the relevant information to finalise it.
The FIAU said in the report that the information available to it was deemed sufficient to conclude that a reasonable suspicion of money laundering and/or the existence of proceeds of crime exists.
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MEP David Casa presented the leaked report to the magistrate conducting the Egrant inquiry last February.
Reacting to the FIAU’s findings, Mr Casa said revelations that 17 Black was created to funnel money to companies owned by Dr Mizzi and Mr Schembri, and the fact that funds were actually transferred to 17 Black, clearly indicated the extent to which the people closest to Prime Minister Joseph Muscat engaged in "illicit activity".
Bahamas accounts expected to generate $2 million
According to the e-mail authored by Nexia BT, the company accounts for Tillgate and Hearnville would generate "around USD2m" within a year.
Nexia BT's Karl Cini said in the e-mails that 17 Black and another company called Macbridge would be paying in money to these Bahamas accounts.
The government officials' financial advisers tried to open the Bahamas bank accounts through the now defunct Panama law firm Mossack Fonseca, which Panamanian prosecutors have described as a potential "criminal organisation".
The e-mails show Nexia BT was willing to pay Mossack Fonseca $9,000 to open up the accounts with the Winterbotham bank in the Bahamas.
Mr Cini told Mossack Fonseca in an e-mail dated December 17, 2015, that the Panama companies would be operating in the maritime and fisheries sector in Bangladesh, tourism in Asia, infrastructure projects in African countries, Indian and the subcontinent, as well as recycling and remote gaming.
Mr Schembri and Dr Mizzi were set to receive "Eur 150,000" monthly through their Panama companies, via 17 Black and Macbridge, according to details provided by Mr Cini in the same e-mail.
Mr Cini informed Mossack Fonseca that the two Panama companies were owned by trusts in New Zealand, and distributions to these trusts would be made “every now and again”.
According to Mr Cini's e-mail, the accounts were going to receive an initial deposit of $100,000 funded by "past profits and retained earnings from existing business or appointments".
Attempts to open Bahamas accounts halted abruptly
Attempts to open the Bahamas account stopped in February 2016, when slain journalist Daphne Caruana Galizia first started hinting on her blog that she knew about their shell companies.
The companies have since been shut down.
Replying to questions put to him by the Daphne Project, Dr Mizzi said there was no connection, direct or otherwise, between the companies and the trust, and any entity called 17 Black.
Confronted with a screenshot of the leaked e-mail, a spokesman for Dr Mizzi reiterated that there was no connection.
“Hearnville never held a bank account, and never received any funds from any source”, the spokesman said.
In a Facebook post uploaded on Wednesday evening, Dr Mizzi said allegations linking him to 17 Black were "a repetition of unfounded allegations" made before the 2017 general election and that he had already denied any knowledge of the two money transfers to 17 Black.
On his part, Mr Schembri said he was following advice from professional financial advisers.
“Nothing my advisors did was illegal,” Mr Schembri said.
In a later statement issued through the Department of Information, the entrepreneur and Prime Minister's chief of staff acknowledged that 17 Black and MacBridge had been potential clients of his business group.
However, he said, "neither 17 Black nor MacBridge ever became clients of my business group, and no transactions were ever recorded with these companies, or with me personally."
"I have no knowledge of the transfers referred to, nor any knowledge of the alleged payment."
A money laundering expert who spoke to Times of Malta on condition of anonymity said the use of multiple jurisdictions and the large volume of planned transactions warranted police investigation.
"The use of multiple jurisdictions like Panama, Bahamas, Dubai and New Zealand, would make it much more difficult for investigators to trace the movement of any funds.
"There are also serious questions to be answered about how these shell companies were going to generate $2 million in a single year, and where the money was going to come from," the expert said.
Both Mr Schembri and Dr Mizzi deny any wrongdoing. They say no bank accounts were ever set up for their Panama companies.
The two men are resisting a magisterial inquiry into their Panama dealings.
Within hours of the 17 Black revelations being published, activist group the Civil Society Network reiterated its calls for Dr Mizzi and Mr Schembri to step aside.
"The revelations by the Daphne Project add further evidence to the Panama Papers illegalities," the group said.
Those calls were echoed by fellow activists #OccupyJustice, who said it was time for Prime Minister Joseph Muscat to "wake up and smell the Black 17 coffee" and resign alongside them.
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