Updated 11.57am with police details
Pilatus Bank and a top official are to be charged in court with money laundering offences within hours.
In a statement, police said charges will be brought "against a local bank" and a 41-year-old Sliema resident, understood to be Claude-Ann Sant Fournier, formerly head of legal at the shuttered bank.
Multiple sources have told Times of Malta that other former senior officials at the bank are to be charged after shocking money laundering shortcomings were uncovered.
Sant Fournier is to be arraigned at 1pm before magistrate Joseph Mifsud.
Another person is understood to have been questioned and released without charge.
It is understood that the authorities have drafted arrest warrants against those involved including at least one foreign national who once acted as a director at the Ta’ Xbiex bank.
In a statement on Thursday, police said the charges were brought after the closure of the magisterial inquiry and following "intensive investigations by the police"
The prosecution will be led by Cinzia Azzopardi Alamango and Marthese Grech from the Attorney General's Office, assisted by Inspectors Claire Borg and Pauline Bonello.
On Tuesday, the bank was handed a record €4.9 million fine by the Financial Intelligence Analysis Unit (FIAU).
The move came some five years after Daphne Caruana Galizia had first reported on suspected money laundering activity at the bank involving top members of the Joseph Muscat administration.
This is not the first time the police have hinted at prosecutions in the case.
Delays in the probe, including an administrative hiccup with a magisterial inquiry, meant the initial target of arraigning several bank officials by the end of August 2020 was pushed back by several months.
Criminal charges held off until FIAU fine
Police sources said they had only been handed an actionable version of an inquiry into the bank’s activities “recently”.
It is understood that the police also held off on pressing criminal charges until after the FIAU issued its administrative fine.
Meanwhile, Prime Minister Robert Abela said on Wednesday that the record FIAU fine was an important step.
As for criminal prosecutions, he said the ball was in the court of the attorney general and the police. The government would not meddle in what must be an independent process, he added.
Initial target of arraigning several bank officials by the end of August 2020 pushed back by several months
In a statement, the PN said Central Bank governor Edward Scicluna is not worthy of his position after having defended Pilatus Bank when he served as finance minister.
The FIAU’s findings confirmed that the Labour government had turned a blind eye to money laundering and financial crime.
As minister responsible for the financial regulator, the PN said, Scicluna had the final responsibility for the banking system but not only did he fail to act but defended the institution to the end.
The shuttered bank's recent history
Pilatus Bank was closed when its licence was stripped by the European Central Bank in November 2018, following the arrest of its founder and chairman, Ali Sadr in the US.
Sadr has since been released after being found not guilty of money-laundering charges due to disclosure failures by the prosecution.
That same year, the European Banking Authority criticised the FIAU’s failure to impose sanctions on the bank, despite its misgivings about its anti-money laundering controls.
A reform of the FIAU’s procedures ensued and a second review of the bank uncovered a “serious and systemic failure” to follow anti-money laundering laws.
In issuing its fine this week – the maximum amount the agency can impose – the FIAU found that the bank had exposed itself and the Maltese jurisdiction to “egregious” money-laundering risks that were not mitigated in any manner.
This included onboarding politically appointed customers, high net worth customers and companies dealing in high-risk jurisdictions and which were projecting to transact millions of euros annually.
Times of Malta previously revealed, as part of the Daphne Project, how a network of over 50 companies and trusts secretly owned by Azerbaijan’s ruling elite used accounts at Pilatus Bank to move millions around Europe.
An inquiry into the bank’s operations was opened days before the order to shutter the bank was handed down in 2018. The inquiry has since concluded and charges in connection with the bank’s operations are set to be issued.
Former prime minister Joseph Muscat and top aide Keith Schembri were both revealed to have attended Sadr’s wedding in Italy.
Yorgen Fenech, the man behind suspected kickbacks vehicle 17 Black and who is accused of conspiring to murder Caruana Galizia in 2017, was also invited to the 2015 celebration.
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