Updated | FIAU had 'reasonable suspicion' kickbacks were paid over sales of passports, newspaper reports

A report compiled by the Financial Intelligence Analysis Unit (FIAU) had been passed on to the Police Commissioner for further action in May 2016, although no apparent investigation by the police was pursued, the Sunday Times of Malta reports.

The newspaper, which says that it has seen the report by the FIAU, also reports that the Unit had “reasonable suspicion” that kickbacks were paid over the sale of passports and that money was passed on between Nexia BT managing partner Brian Tonna and OPM chief of staff, Keith Schembri.

The FIAU, the newspaper adds, found that Schembri received at least €100,000 in two separate transactions from a BVI registered company, Willerby Trade Inc. The money was transferred soon after three Russian citizens paid to obtain their Maltese passports.

The Russians made their payments through Willerby's account in Pilatus Bank, and a portion of the funds was then transferred to an account at the same bank in the name of Keith Allen Schembri. Willerby Trade Inc is owned by Tonna.

In a reaction on Sunday morning, Schembri said he was "amazed" by the news report, "since to date I have never been informed or otherwise made aware of the existence of any such report. Neither have I ever been questioned by any official of the FIAU nor been asked to provide any information to the Unit".

"I will not comment on the apparent conclusions of the report as reported, apart from re-affirming that I have never received, solicited, or otherwise induced anyone to give me monies I was not rightfully due. I would like to point out that it makes no sense that I would have participated in the activities the alleged report refers to by making use of a personal bank account, registered in my name here in Malta and then further proceeding to make use of it for personal use by means of a credit card, thus making the existence of same account and funds known to all regulatory entities," Schembri said in an official statement.

"I do however note the timing of the publication of this alleged report, falling right in the middle of an electoral campaign.  The report itself, the methods, and strategies deployed in this regard all smack of political expediency."

The same allegations have been raised by Opposition leader Simon Busuttil and have been passed on for a magisterial inquiry. It now transpires that the allegations were reportedly included in the report by the FIAU.

Busuttil has passed on to Aaron Bugeja – the magistrate investigating allegations that the Prime Minister’s wife owns the Panama offshore company Egrant – “irrefutable evidence”. Bugeja on Thursday issued a decree that Busuttil’s complaints will have to be investigated by a new duty magistrate. 

Schembri and Tonna have vehemently denied the accusations of kickbacks, saying that the payment was for a 2012 loan granted from Schembri to Tonna. But according to the newspaper, the FIAU reportedly warned that the loan agreement could have been a “bogus loan”. It reportedly also said that Schembri “took a personal interest in the licensing process” of the bank.

Attorney General Peter Grech, who chairs the FIAU, has insisted he did not have the power to initiate a prosecution or conduct investigations, as the law gave this power solely to the police commissioner.

However, the Prevention of Money Laundering Law states that where, upon information received, the AG “has reasonable cause to suspect that a person is guilty of money laundering”, he may apply to the Criminal Court for an investigation order…”