[WATCH] Keith Schembri’s wife charged with money laundering, granted bail

Josette Schembri Vella and her company 3City Designs Ltd, have been charged with laundering €1.5 million.

Schembri Vella, 45, of Mellieha, appeared in court before magistrate Claire Stafrace Zammit, accused of laundering money between 2008 and 2020 and failing to observe all of the duties of a company director. 

She is the wife of the former Muscat administration’s Chief of Staff Keith Schembri, who is himself accused of money laundering in separate proceedings.

The prosecution was unable or unwilling to say what the predicate offence – the crime necessitating the laundering of the money – was.

This was part of a worrying trend, said the defence, whereby people were arraigned on what appeared to be trumped up money laundering charges and arguing that this was all because of Malta’s greylisting.

Gatt argued that the charges had nothing to do with the evidence she was shown in disclosure by the police, decrying what he said was a “huge abuse of power.”

She pleaded not guilty to the charges and was granted bail against a deposit of €10,000 and a personal guarantee of €40,000.

Lawyers Edward Gatt, Veronique Dalli, Mark Vassallo and Ishmael Psaila appeared for the accused.

Lawyers Antoine Agius Bonnici and Andrea Zammit appeared for the office of the Attorney General. Superintendent Frank Anthony Tabone and Inspectors Lianne Bonello and Ian Camilleri prosecuted.

14:08 The sitting is now over. Thanks for following the sitting with us. We will be uploading a full write-up shortly. Nicole Meilak

14:07 Bail is being granted against a €10,000 deposit and personal guarantee of €40,000. Nicole Meilak

14:07 Schembri Vella is to sign a bail book four times a week, and must observe a curfew between midnight and 6:30am. Nicole Meilak

14:06 Agius Bonnici says that the prosecution is insisting on a curfew. Bail is granted. Nicole Meilak

14:05 The magistrate asks if the prosecution is insisting on a curfew. The defence points out that she might need to pick up her children at late times, or that other issues may crop up. Nicole Meilak

14:04 There is silence in the courtroom as the magistrate writes down notes on her decree. Nicole Meilak

14:03 He continues that her money is all frozen. The attachment order extends to her entire family, including her children who are minors. This is confirmed by the prosecution, but the AG lawyer says the children’s freezing order was later lifted. Agius Bonnici asks for a balance to be struck between the conditions and her rights. Nicole Meilak

14:02 “She has two children, aged 16 and 18, and takes care of them. Her husband is going through what he is going through, and let us not say that Josette Schembri Vella could abscond,” Gatt says. Nicole Meilak

14:01 She is being accused as a representative of the company, the AG lawyer says. Gatt thanks the prosecution for not objecting, and says it is up to the court to decide on the conditions. He adds that the couple are going through enormous financial difficulties, and remarks that there is a witch-hunt against her husband and his father. Nicole Meilak

13:59 There are witnesses who may be approached, and an additional fear that she could abscond, he says. Nicole Meilak

13:59 The court upholds the freezing order, and moves on to bail. Gatt asks if the prosecution objects, and Agius Bonnici says that the AG is not objecting as long as stringent conditions are imposed. Nicole Meilak

13:58 Gatt dictates a note, objecting to the freezing order and specifying that the amount being laundered is €1.5 million. Nicole Meilak

13:57 Inspector Leanne Bonello is now summoned to the stand. She says the amount is €1.5 million, which results from several transactions on which they were given in disclosure. Gatt is accusing her of lying. Nicole Meilak

13:56 Tabone is asked on the amounts transferred to the companies being charged today. “All I can say is that the investigators drew my attention to transactions from one company to another company, and I told them to give der disclosure on what they had.”
It is understood that one of the companies in question is 3City Designs Limited, in which Schembri Vella owns a 50% shareholding in. KASCO Holdings, her husband’s company, owns the remaining 50%. Nicole Meilak

13:48 Gatt begins to question Tabone, who is a superintendent stationed in the Financial Crimes and Investigations Department. Nicole Meilak

13:48 Gatt asks that Superintendent Tabone be summoned to testify on the freezing order. He is summoned and administered the oath. Nicole Meilak

13:47 Superintendent Frank Tabone says that they were asked about the facts on which disclosure is given. Gatt invites him to dictate a note saying that the charges he is arraigning on today was tied to the disclosure - but the AG lawyer refuses. Nicole Meilak

13:45 The defence is strongly objecting the request for a freezing order. Gatt says the disclosure given by police was unrelated to today's proceedings. "We have a huge abuse of power here," Gatt exclaims. Nicole Meilak

13:44 The court asks if a value would be specified later on during the proceedings. Meanwhile, Gatt states that it is obvious that police have no idea of how much money was allegedly laundered, similar to Yorgen Fenech's arraignment when police failed to specify the exact predicate crime nor the exact amounts laundered. Nicole Meilak

13:41 Gatt asks if the prosecution is in a position to declare how much was laundered. Another lawyer from the Attorney General's office, Antoine Agius Bonnici, says he is not in a position to do so. Nicole Meilak

13:39 He additionally stated that a new practice is developing whereby a predicate offence isn't needed for money laundering charges. The charges she faces are that, as director, she didn't follow the obligations of a director, that she didn't call as many board meetings as required. Nicole Meilak

13:38 "These are all strategic actions by a powerful person which are not necessarily intended to satisfy the juridical aspect," he continues. "I cannot but object to the request for a freezing order." Nicole Meilak

13:37 It appears that she has been under an attachment order for a year, with the order expiring today. Nicole Meilak

13:36 He continues that they will be contesting the accusations. "These are trumped up charges, some don't exist," he goes on. Nicole Meilak

13:35 Edward Gatt argues that he is noticing a common practice as of late with regards to financial offences. He says they are pushed by "national necessity". Nicole Meilak

13:34 Schembri Vella is asked her details, replying that she is an interior designer. She pleads not guilty to the charges. The Attorney General's lawyers explain that the freezing order is being requested over the company, and not on her own assets. Nicole Meilak

13:30 The sitting begins. Lawyers Antoine Agius Bonnici and Andrea Zammit are appearing on behalf of the Attorney General's office. Lawyers Edward Gatt, Mark Vassallo and Veronique Dalli will be defence counsel to Schembri Vella. Nicole Meilak

13:16 Good afternoon. We will be reporting live as Keith Schembri's wife, Josette Schembri Vella, is set to be charged with money laundering this afternoon. Nicole Meilak