Two separate money-laundering inquiries into the Prime Minister’s chief of staff Keith Schembri have yet to be concluded, nearly two years after being assigned to the inquiring magistrates. 

Both inquiries are based on leaked FIAU reports sent to the police’s Economic Crimes Unit for criminal investigation in 2016.

One inquiry, being led by Magistrate Natasha Galea Sciberras, is gathering evidence about the reasons behind two €50,000 payments that passed between accountant Brian Tonna and Mr Schembri.

Analysis by the FIAU found a reasonable suspicion that the payments were intended as a kickback to Mr Schembri on passport sales to three Russians by Nexia BT, the audit firm owned by Mr Tonna.

The other inquiry, spearheaded by Magistrate Josette Demicoli, is analysing €600,000 worth of payments that passed from Mr Schembri to former Allied Group managing director Adrian Hillman through domestic and offshore personal accounts, bank accounts in the names of domestic and offshore companies and through a domestic investment firm.

Both magistrates declined to comment on their inquiries

Both magistrates declined to comment on the progress of their inquiries and whether they have faced any obstacles in their work when questioned by The Sunday Times of Malta.

The progress of the two Schembri inquiries contrasts with that of the Egrant inquiry, concluded last July within 15 months by Magistrate, now newly promoted judge, Aaron Bugeja. The Egrant inquiry started a few weeks before the two Schembri inquiries.

Expertise initially directed towards Egrant probe

A source familiar with the work involved said all three inquiries are dependent to varying extents on the cooperation of foreign jurisdictions.

Requests by the courts for information from foreign jurisdictions are known to take considerable lengths of time, depending on the country involved.

The source said a lot of the court expertise being used for the Schembri inquiries was initially tied up in the complex evidence-gathering processes needed for the Egrant probe.

Mr Justice Aaron Bugeja said in the published conclusions for the Egrant inquiry that evidence relevant to the two other probes was obtained during his own inquiry.

Of the two inquiries, the one being led by Josette Demicoli looks to be the more complex.

The money flows being traced in that inquiry involve accounts in Gibraltar and Switzerland, as well as in local financial institutions, including MFSP (since renamed as Zenith Finance), Pilatus Bank, Sparkasse Bank and HSBC.

It is likely that this inquiry also requires cooperation from the British Virgin Islands, which holds information about Lester Holdings, the company used by Mr Hillman to receive the payments in US dollars and euros from the Prime Minister’s chief of staff between 2010 and 2015.

Mr Hillman oversaw the award of a lucrative multi-million euro contract for Mr Schembri’s company Kasco to supply printing equipment to Progress Press, Allied Group’s printing arm.

On paper, the inquiry being led by Magistrate Galea Sciberras looks the simpler of the two in terms of evidence gathering, as the €100,000 payment between Mr Tonna and Mr Schembri was transferred locally via Pilatus Bank.

However, information would also be needed from the British Virgin Islands, where the company used by Mr Tonna to send the two €50,000 payments was based.

Suspicions about the purpose of these transactions were raised after the FIAU found €166,000 were sent to Mr Tonna’s Pilatus account by three Russian passport buyers.

Part of those funds were then transferred on to Mr Schembri for what the men described as a loan repayment for money lent to Mr Tonna in 2012 to help him during his separation proceedings.

The Tonnas’ separation deed shows the couple jointly bought a Żejtun field 15 days after the date of the agreement for the €100,000 “loan” to help him with the separation.

How does this contrast with Egrant?

Aaron Bugeja was tasked with establishing whether the shell company Egrant was owned by Prime Minister Joseph Muscat’s wife Michelle.

The inquiry heard the testimony of 477 witnesses, requested information or assistance from authorities in five countries – Panama, Belgium, Germany, US and the UAE  – and engaged various IT experts and firms.

These included foreign firms, such as UK-based firms Ansec IA Ltd, Harbinson Forensics and Key Forensic Services, as well as local IT experts Godwin Caruana and inspector Timothy Zammit.

In the UAE’s case, which also happens to be where the mystery company 17 Black is domiciled, no official cooperation was forthcoming.

The Egrant inquiry also obtained assurances from Oracle Flexcube banking software experts that information on Pilatus Bank servers could be relied upon “from its first day of operation”.

Will we know when the inquiries are concluded?

There is no procedure or obligation for a magistrate to inform the public that an inquiry has been concluded.

It is also up to the discretion of the Attorney General whether to publish the inquiry details or not after a formal request is made. Such a request can be made by any ordinary citizen.

For the Egrant inquiry, the Attorney General published a 49-page document containing the main conclusions from the 15-month evidence gathering process.

Joseph Muscat said in 2017 that his top aide and close friend would have to resign if the inquiries found any wrongdoing.