Keith Schembri, the former OPM chief of staff, will spend this weekend behind the walls of Corradino Correctional Facility after a bail request was pushed to next week.
Schembri, his father Alfio, Kasco CEO Malcolm Scerri, and accountant Robert Zammit were informed of the decision during today’s compilation of evidence on charges of money-laundering, corruption, and criminal conspiracy.
A request for bail will now be heard on Monday 29th March at 1pm.
Schembri and the other accused were first arrested and charged on Saturday 20th March. They were denied bail amid fears that they could tamper with evidence and potentially abscond from the islands.
Today was their first appearance in court since, with police inspectors revealing a web of offshore structures to allegedly profit off the sale of passports and Allied Newspapers’ purchase of printing equipment.
One inquiry is related to allegations that Schembri channeled over €650,000 to then-Allied Newspapers Managing Director Adrian Hillman in suspicious payments between 2011 and 2015 in a deal which saw his company, Kasco, supply a printing press to Times of Malta in 2008.
Inspectors revealed how Schembri, Scerri, former Allied Newspapers head Vince Buhagiar, and Hillman split a $5 million profit off of Progress Press’ multi-million overpayment for printing machinery.
Allied Newspapers bought the machinery for €13 million through offshore structures, but they were worth around €2 million according to the customs declarations.
“What should have been a relatively simple transaction became a convoluted series of transactions intended to hide commissions… coordinated by the same people who were involved in the deal,” Inspector Xerri told the court.
The other is related to a suspected passport kickbacks scheme between Schembri and Nexia BT’s Brian Tonna. According to a leaked report by the Financial Intelligence Analysis Unit (FIAU), Tonna transferred two €50,000 payments through Pilatus Bank to Schembri.
Today, a court heard how Schembri had opened an account at Pilatus Bank just weeks before transfers on an alleged passport kickbacks scheme took place.
While the inspector did confirm that there was no prima facie evidence of kickbacks, she said that the explanations given by the men, that the payments were a repayment of a loan, were not credible.
Police said that in both cases, Nexia BT’s Brian Tonna, Karl Cini, and MFSP’s (now Zenith) Matthew Pace played crucial roles in backdating and falsifying documents to deceive authorities about the alleged illicit payments.
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