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Money laundering case: Keith Schembri's father would be asked to sign documents he had no knowledge of
The compilation of evidence against former OPM chief of staff Keith Schembri and associates from his Kasco Group of companies continues with police testifying on what accused said during interrogation
11 May 2021, 8:47am
Karl Azzopardi
Karl Azzopardi
2 min read
Alfio Schembri, the father of Keith Schembri, has also been charged as a director of his son's companies
Keith Schembri’s father, Alfio, had told police that he would be asked to sign documents but did not know what they were, the court heard this morning.
The information comes from the testimony of Inspector Leanne Bonello in the compilation of evidence against the Schembris and two other men accused of various financial crimes, including money laundering, fraud and corruption.
Keith Schembri was excused by the magistrate after being hospitalised on Monday with a serious medical condition.
Bonello told the court that during police interrogations, Alfio, confirmed that he had received a monthly salary from the Kasco Group for the last 10 years. He had started the company and then passed it on to his son, Keith.
Bonello said Alfio told police he had no say in how the company was managed as director.
“When shown a number of documents, Alfio Schembri did not know what they were about. The documents included transactions, bank statements and wages,” the inspector testified.
An analysis of Alfio Schembri’s bank accounts showed a number of transaction from Kasco and related companies. Payments from his account to Keith Schembri’s accounts were also found.
Bonello said financial controller Robert Zammit, one of the accused, had told police he followed orders and was never involved in the Progress Press printing press project.
Zammit told police that after Keith Schembri was made chief of staff at the Office of the Prime Minister in 2013, Schembri’s wage would go to Alfio (his father), who would in turn donate it to his son.
The fourth accused is Malcolm Scerri, a business partner to Keith Schembri.
The criminal proceedings started after a magisterial inquiry probed the sale of printing equipment by Kasco to Progress Press when the latter moved into the new printing press in Mrieħel.
Keith Schembri is accused of passing on backhanders to two directors at the Allied Group – Adrian Hillman and Vince Buhagiar - to secure the printing machinery contract.
Several other people, including Schembri’s accountants at Nexia BT, investment managers at Zenith Finance and a former Progress Press director, are also facing charges of money laundering.
Hillman is in the UK and police have initiated the process to extradite him.
The case is being heard by Magistrate Donatella Frendo Dimech.
11:21 The sitting will continue tomorrow at 9:00am. Thank you for following, a summary will appear shortly.
Kurt Sansone
11:20 She steps off the witness stand. That’s it for today.
Kurt Sansone
11:20 No information was found on Kasco Engineering, GSV Company Limited, Holdporth Limited, Malmos Limited, Its Good Ltd, Colson Services, Selson Holding Corporation, Techne Industrial Limited, Burner Malta Limited. Tug Zone Limited had two allotments of shares and three share transfers.
Kurt Sansone
11:07 She also lists capital transfer deals involving the companies. Kasco Holdings Limited had five allotment of shares and six transfer of shares. Kasco Limited had two contracts and one promise of sale agreement.
Kurt Sansone
11:06 Josette Galdes, a representative of the Capital Transfer Duty section within the Tax Commissioner’s office takes the witness stand. She lists the share transfers and property sales the accused were involved in: Malcom Scerri had three share transfers; Alfio Schembri had two contracts and nine share transfers; Keith Schembri had four share transfers, four contracts and one allotment of shares; and Robert Zammit had two contracts.
Kurt Sansone
11:04 VAT department representative Vincienne Vella takes the stand. She presents documentation related to the directorships and companies registered with the department linked to the accused.
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10:52 Accountancy board representative Martin Spiteri takes the stand. He says Robert Zammit has a valid accounting licence which he paid yearly.
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10:51 Debono steps off the witness stand.
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10:43 Keith Schembri’s tax payer registration, tax liability statements and other relevant documents are also submitted. The tax official says that Schembri was a non-filer for the year 2020.
Kurt Sansone
10:39 Joe Debono from the Tax Commissioner’s office takes the witness stand. He presents Robert Zammit’s tax payer registration form and tax liability statement. Presenting tax payer returns between 2005 and 2019, Debono says Zammit did not pay taxes for a number of years during the period.
Kurt Sansone
10:34 Miriam Azzopardi from the Malta Stock Exchange takes the witness stand. She says Robert Zammit has no account with the MSE. Alfio Zammit has two accounts, one is empty, while the other has an active balance. She steps off the witness stand.
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10:26 Joe Saliba from JobsPlus takes the stand. He presents the employment history of the accused.
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10:26 Claudette Fenech from the Registrar of Companies takes the witness stand and presents a list of the involvement of the four accused in Maltese-registered companies. She says companies like Malmos Limited, an offshore company, had no involvement in Malta.
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10:23 The magistrate says she had already given a decree in which she had appointed the administrator, and that it was self-explanatory. Aloisio steps off the witness stand.
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10:18 The court is discussing Aloisio’s role as administrator after he raised concerns over his role. He insists that there are difficulties with administering the company without executive powers. “It’s difficult to administer a company that is still trading,” he says. Aloisio adds that he needs an “enormous team” of people to carry out the work.
Kurt Sansone
10:08 Two boxes of documents have been submitted as evidence on the transactions.
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10:06 Aloisio points out that his role was that of supervising the transactions, rather than administering the company, saying that a board of directors still exists. “I just supervised transactions, rather taking administrative decisions,” he tells the court.
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10:05 Administrator Raphael Aloisio takes the witness stand. Last November he was appointed by the court to administer the companies under attachment order. He had told the court about the difficulties surrounding the administration of such companies. The main aim was to ensure that normal transactions are still carried out. They were tasked with compiling a list of “prohibited transactions”, a list of “normal transactions”, a list of “emergency transfers” and to present a report on their work during the attachment order.
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10:04 Farrugia steps off the witness stand.
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10:03 Keith Schembri also received dividends of €120,000 from Kasco Recycling and €200,000 from Kasco Engineering.
Kurt Sansone
09:54 The witness says that Keith Schembri received a number of cheques, 15 of which came from Alfio Schembri. He also received an additional 40 cheques, which had been issued from Kasco Group by Alfio Schembri. The cheques were cashed into Keith Schembri and his wife’s accounts.
Kurt Sansone
09:50 The police constable also says that Keith Schembri also has two joint accounts with his wife Josette.
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09:49 Investigations showed that Keith Schembri had income as chief of staff, CEO of Kasco Holdings limited, and as a consultant with Kasco Engineering on a part-time basis. He also received company dividends.
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09:46 Police constable Andrea Farrugia takes the witness stand. He was assigned to a task force to analyse bank accounts of BTI Management limited, as well as Keith and Alfio Schembri.
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09:45 Inspector Leanne Bonello steps off the witness stand.
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09:45 Alfio Schembri told police that he would be asked to sign documents, but he did not know what he would be signing.
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09:45 An analysis of Alfio Schembri’s bank accounts showed a number of transaction from Kasco and related companies. Payments from his account to Keith Schembri’s accounts were also found.
Kurt Sansone
09:40 When shown a number of documents, Alfio Schembri did not know what they were about. The documents included transactions, bank statements and wages.
Kurt Sansone
09:40 The police inspector says that Alfio Schembri confirmed that he had received a monthly salary from Kasco Group, for the last 10 years. He had no say in how the company was managed as director. Alfio told police it was him who started the Kasco Group, and Keith Schembri had taken over.
Kurt Sansone
09:38 She moves on to Keith Schembri who gave a statement in December 2020. Schembri had told police that he had no knowledge of the BOV ‘900 account’. He had also been asked on the relationship between him and his father, where he said that he received a cheque on a monthly basis for “him and his wife”. The inspector adds that during interrogations last March, just before his arraignment, Keith Schembri did not respond to questions.
Kurt Sansone
09:37 Bonello continues recounting what Zammit told police. The Kasco Group financial controller had said that the printing press profits were shared among the partners.
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09:36 The inspector says that Karl Cini from Nexia BT would also give Zammit instructions. On transactions from foreign jurisdictions, the financial controller told police to question Nexia BT.
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09:27 Bonello says that Zammit told police that after Keith Schembri was made chief of staff at the Office of the Prime Minister in 2013, Schembri’s wage would go to Alfio (his father), who would in turn donate it to his son.
Kurt Sansone
09:26 She says that financial controller Robert Zammit confirmed his involvement in the Kasco Group. He informed inspectors that he followed orders, but was never involved in the Progress Press printing press project.
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09:24 Inspector Leanne Bonello takes the stand. She will be testifying on investigations under her remit.
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09:23 Dr Andrea Zammit from the AG’s office informs the court that the prosecution wants to present its inquiries. The inquiry requested by former Opposition leader Simon Busuttil in 2017 is presented. Court registrar Liandra Zerafa presents the procès-verbal on electronic devices seized by the police’s financial crimes unit.
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09:18 Dr Katja Vassallo who was tasked with transcribing Keith Schembri’s statement to the police presents the transcript.
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09:14 Lawyer Edward Gatt informs the magistrate that Keith Schembri has been hospitalised. Gatt informs the magistrate that Schembri will not be able to attend tomorrow’s sitting either. He also requested Schembri’s father, Alfio, be exempted from attending the sitting so he can accompany his son. The court accepts the requests.
Kurt Sansone
09:09 Magistrate Donatella Frendo Dimech enters the courtroom.
Kurt Sansone
08:59 Keith Schembri, his father Alfio, business partner Malcolm Scerri and financial controller Robert Zammit face charges of money laundering, fraud, forgery and corruption. The case revolves around printing equipment that Schembri's company sold to Progress Press when they moved to their new premises in Mrieħel. Police have pressed charges over what investigators believe is a case of corruption in the private sector when Schembri paid backhanders to two directors at the Allied Group to win the contract.
Kurt Sansone
08:50 We are waiting for proceedings to start. However, we have been informed that Keith Schembri will not be appearing in court this morning since he is receiving medical treatment in hospital.
Kurt Sansone
08:49 Good morning.
Kurt Sansone
Karl Azzopardi is Online Editor and an IGM press awards (Human Stories) winner of 2019
