Vince Buhagiar received thousands from Gibraltar company belonging to Keith Schembri

Vince Buhagiar, the former chairman of Progress Press and Allied Group director, could not explain to police money transfers he received in his investment account from a Gibraltar company belonging to Keith Schembri

27 April 2021, 12:22pm
by Matthew Agius

2 min read

Vince Buhagiar was unable to explain to police payments he received from a Gibraltar company belonging to former OPM chief of staff Keith Schembri, a court heard today.

Buhagiar, a former chairman of Progress Press and managing director of Allied Newspapers, publishers of Times of Malta, had received over $134,000, over $105,000 and €50,000 from an account in JYSK Bank in Gibraltar.

Police officers involved in Buhagiar’s arrest and interrogation continued testifying this afternoon in the compilation of evidence. Buhagiar is charged with money laundering.

He denies the charges.

Inspector Ian Camilleri told the court that investigators found an email from Keith Schembri with instructions to pass on $50,000 to a ‘VB’.

Camilleri said Buhagiar was unable to explain the payments originating from Malmos Ltd, a Gibraltar-based company owned by Schembri.

Buhagiar told police the money was for consultancies and there was nothing in writing because it was “a gentleman’s agreement”.

The accused had told police that he never used his VAT number because Kasco, the company he was supposed to be providing consultancy to, never asked for invoices. He told the police that he was never paid in cash.

The money was transferred in Buhagiar’s investment account with MFSP, later re-named Zenith Finance. The owners of Zenith are facing separate money laundering charges.

The case concerning Buhagiar involved allegations that former OPM chief of staff Keith Schembri conspired with Buhagiar and another Allied Group managing director, Adrian Hillman, to cream off thousands from a deal through which Progress Press bought printing machinery from Kasco.

Hillman is being sought by the police and extradition proceedings in the UK have started.

The case is being heard in front of Magistrate Donatella Frendo Dimech.

Veronique Dalli is defence lawyer.

13:22 That's it for today. Thank you for following. Kurt Sansone

13:21 The next sitting is on 17 May at 9am. Kurt Sansone

13:19 She exhibits a note as requested by the court's decree of 5 April, requesting that the accused be allowed to withdraw his pension from a frozen bank account. The court says it would authorise the accused to withdraw the amount of his pension every month. A decree on the matter will be given from chambers. The prosecution says it has no objection to the request. Kurt Sansone

13:15 Dalli raises a point about the accused's pension and presents a document in the sitting. Kurt Sansone

13:15 He was the last witness for today. The magistrate praises the prosecution on its "formidable" time management in this case. Kurt Sansone

13:11 She says that she found three contracts - two in 2009 and one in 2011. One is where Buhagiar is selling a maisonette in Swieqi for €235,267, another is him buying an apartment and garage in Swieqi for €286,500. The third contract is one where Buhagiar is purchasing with third parties a lockup garage in the same block in Swieqi for €20,000. Kurt Sansone

13:08 Josette Galdes, representative of the Capital Transfers and Duty Department takes the stand. Kurt Sansone

13:08 Defence lawyer Veronique Dalli asks him about VAT. The witness says that Buhagiar didn't owe, nor was he due any monies, from the VAT department. Other questions relate to the nomenclature used in the document and the software used. The witness’s examination is over. Kurt Sansone

13:06 A VAT department representative, Dr Miguel Balzan testifies next. He was asked to provide information on whether the VAT department had data on Buhagiar and if he had a VAT number. Balzan says the department had information on his companies, and as an individual, his VAT number, balance and returns. Kurt Sansone

13:03 Joseph Debono from Inland Revenue takes the stand. He presents the income tax returns for Buhagiar from 2005 to date. In 2018 and 2019 he was not obliged to file a tax return. He also exhibits tax paid on part time self-employment by Buhagiar. Kurt Sansone

12:57 Parnis says that Buhagiar is not involved in any companies presently. However, he was company secretary and later director of Allied Insurance Agency Ltd. The accused left that role in 2013. The company had ceased to operate in 2002. Kurt Sansone

12:56 Alfred Parnis representing the MFSA takes the stand next. He's part of the insurance and pensions supervision unit. Kurt Sansone

12:56 Dr Claudette Fenech from the Malta Business Registry now testifies. She says that Buhagiar had no involvement in any companies since 2005. Her deposition is suspended pending further research on Allied and Progress Press. Kurt Sansone

12:54 A representative of JobsPlus now takes the stand, presenting the employment history of the accused. He hands over the documents and is allowed to leave the courtroom. Kurt Sansone

12:51 There is nothing to ask in cross-examination. Kurt Sansone

12:51 A police constable stationed at the FCID takes the stand next. He was involved in the search and arrest of Vince Buhagiar. The police had seized documents, a laptop, two mobiles and an iPad. They were sealed in evidence bags and handed to the inspector. Kurt Sansone

12:50 His testimony mirrors that of the previous witness. Cross-examined by the prosecution, he says he recognises the accused in court today. The objects seized were handled by the inspector, he adds. Kurt Sansone

12:48 A police sergeant from the AML section takes the stand. He also gives his account of the 7 March arrest of Buhagiar at his Swieqi home. Kurt Sansone

12:46 Dalli asks him how long the search took. “Around 30 minutes,” he replies, adding that the accused cooperated with the police. The witness steps off the stand. Kurt Sansone

12:45 The next witness is Inspector Danilo Francalanza. He had executed the arrest warrant against Buhagiar together with another officer. The search of Buhagiar's residence elevated two iPhones and other objects relating to the companies. He exhibits a copy of the receipts for the objects taken by the police. Kurt Sansone

12:44 Defence lawyer Veronique Dalli: “When you say Buhagiar resigned in 2012… He retired and was retained as a consultant.” Kurt Sansone

12:43 Giglio asks where the appointments are registered. Naudi says that as HR manager, he wasn't on the board. He can only give an opinion or what he is told. Kurt Sansone

12:42 Naudi: “I believe there were some of the same people.” Kurt Sansone

12:42 Giglio: “Are the directors shared by the companies?” Kurt Sansone

12:42 The witness explains that employees are employed with Allied Newspapers or Progress press. Parte civile lawyer Joe Giglio asks the witness to describe the roles of the companies. Naudi says Progress is the printing arm, Allied is the publishing arm. He continues: “There are two boards, one for Allied one for Progress.” Kurt Sansone

12:40 Naudi: “[His employment] was [regulated] through invoicing and possibly the minutes of board meetings.” Kurt Sansone

12:39 He is asked for more information on Vincent Buhagiar's employment. Buhagiar started in 1966 and was made director in the 1990s, in 2003 he was made chairman of Progress Press. He retired from Allied, where he was chairman, in 2007 but remained a consultant of Progress Press. There are no work contracts in any of his roles, says the witness. Neither was there a consultancy agreement. Kurt Sansone

12:37 Matthew Naudi of Allied Newspapers takes the stand next. He is asked what his role is. “Right now, I am head of HR at Allied Group,” Naudi replies. Kurt Sansone

12:37 Defence lawyer Veronique Dalli cross examines the witness. She says the issue of Kasco fees is all that remains. Kurt Sansone

12:34 Buhagiar says he never used his VAT number because Kasco never asked for invoices. He told the police that he was never paid in cash. Kurt Sansone

12:33 Camilleri says he was also present for a second statement by Buhagiar, in which he presented justifying documentation on the sale of property and others relating to inheritance. Kurt Sansone

12:32 Several transfers of hundreds of thousands were transferred from JYSK Bank in Gibraltar. Buhagiar was unable to explain how much he was paid per project, the witness tells the court. Kurt Sansone

12:32 Camilleri testifies that there was an email from Keith Schembri to pass on $35,000 to a ‘VB’. He says that Buhagiar was unable to explain the payments originating from Malmos Ltd, a Gibraltar-based company owned by Keith Schembri. The inspector says that Buhagiar told police the money was for consultancies and there was nothing in writing because it was “a gentleman’s agreement”. Buhagiar received over $134,000, over $105,000 and €50,000 from an account in a bank in Gibraltar. Kurt Sansone

12:27 Camilleri says he had spoken to Buhagiar after his arrest at home on 7 March 2021. Buhagiar was given documentation as disclosure before he gave his statement. Kurt Sansone

12:26 Camilleri testifies about Operation NH, which led to several arrests, including that of Buhagiar. Camilleri is part of FCID’s AML squad. He was assigned to the team investigating the conclusions of Magistrate Josette Demicoli's inquiry. Kurt Sansone

12:26 A court transcriber exhibits a transcription of three statements issued by Vince Buhagiar to the police. The next witness is police Inspector Ian Camilleri. Kurt Sansone

12:24 Good afternoon. Kurt Sansone

Matthew Agius is Senior Reporter on Law and Court Affairs at MaltaToday. He is also a Leg...