FIAU asked police to probe Keith Schembri weeks after Panamagate

Investigations by the financial intelligence analysis unit (FIAU) had recommended further investigations into the Prime Minister’s chief of staff, Keith Schembri, The Times reported.

The Panama Papers – officially broken on 3 April 2016 – had revealed that Schembri and then energy minister Konrad Mizzi had opened two offshore Panama companies and New Zealand trusts.

The newspaper said the FIAU report was handed over to the police shortly before the April 2016 Cabinet reshuffle of 28 April, leading to Mizzi being ‘demoted’ to a minister without portfolio inside the Office of the Prime Minister.

The FIAU acts on suspicious transaction reports forwarded by service providers but then forwards them to the police to investigate further and start criminal proceedings if necessary.

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Former police commissioner Michael Cassar did not deny the transmission of the report to the police, telling the newspaper he could not be blamed if the police failed to probe the FIAU’s findings further, having left after a week of sick leave.

That same year, the director of the FIAU, Manfred Galdes, went on to leave the agency and take up private employment.

The police never investigated the Panama Papers, but tax probes were opened by the Inland Revenue Department.

The Panama Papers also received that in 2014, Schembri had $725,000 in assets held through a company in the British Virgin Islands, set up by his auditor Brian Tonna, whose firm Nexia BT also set up the Panama firms through Mossack Fonseca.

Tonna was also revealed to be the beneficial owner of two companies in the BVI, which in 2014, had collective holdings of over €520,000.

On Monday, Opposition leader Simon Busuttil alleged that Tonna had kicked back €100,000 from his BVI company Willerby Trade, to Schembri’s bank account at Pilatus Bank, ostensibly after having received service fees from a Russian family that had successfully acquired Maltese citizenship through the Individual Investor Programme.

Schembri has denied the allegation, saying he had loaned the money to Tonna in 2012 during the latter’s marital separation case, and that Tonna had paid him back the money. He also said he would cooperate with the magisterial inquiry underway into allegations that the Prime Minister’s wife possesses a secret offshore company.

“Tonna did settle a transaction of a loan for which the necessary evidence exists, which loan was made in 2012, and hence well before Labour entered Government and before the IIP scheme was conceived. Similar and larger facilities were given by myself and my companies to Allied Newspapers and the Nationalist Party’s Media.link commercial arm. One might expect Simon Busuttil now to assume I have been paid kickbacks by them too.”

Schembri is the owner of the Kasco group, which includes the Kasco paper merchants supplying newsprint to Progress Press as well as the former Independence Print owned by the Nationalist Party.