Keith Schembri, Adrian Hillman, Malcolm Scerri, and Vince Buhagiar split a $5 million profit off of Progress Press’ multi-million overpayment for printing machinery.
In court today, Inspector Xerri revealed that three printing machines purchased by Progress Press’ Allied Newspapers were bought for €13 million through offshore structures. The machines 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,” Xerri told the court.
The case itself dates back to 2007 when Buhagiar was chairman of Progress Press and Hillman was managing director. Kasco Engineering was one of three companies at the time to apply for a tender for new printing machines. A US$13 million offer was eventually accepted.
The deal was successful with Kasco selling €21 million in raw materials to Progress Press between 2010 and 2016.
An offshore company owned by Schembri, Malmos Ltd, has initially paid for the machines, which were around €2million each.
For each piece of machinery, Schembri’s Credit Suisse account received the money before transferring US$300,000 to another account of Schembri’s, and US$168,000 to an MFSP (now Zenith) account of Hillman’s.
There was also a payment of US$350,000 to Malcolm Scerri from Malmos Ltd and another US$135,000 payment to Hillman.
Hillman’s offshore company Lester Holdings received also a total of US$225,000 from Kasco Engineering. Meanwhile, Buhagiar pocketed €50,000 through his MFSP account.
Malmos Ltd also made a separate payment of US$105,000 to Buhagiar for “consultancy fees”.
In total, police believe that Schembri issued around €5.5 million in total to those involved. It appears that Hillman received well over €1 million in all.
The inspector said that documents written up by Nexia BT’s Brian Tonna, Karl Cini and MFSP’s Matthew Pace to say that the payments were for consultancy were falsified as no consultancy was ever given. They also played a role in falsifying other declarations.
Upon interrogation over the issue, Schembri told the police he could not find any documents related to Hillman’s consultancy services.
Schembri confirmed with police that he had been friends with Hillman since 2001 and they had worked together on various projects. He told police that up until Hillman joined Allied, Kasco found it difficult to win contracts with the printing press.
Schembri said that various directors at Allied had gone on a trip to Brussels to even scout the new machinery. However, in a sensational detail, Schembri also told police that Kasco had given the company a €1 million loan, payable over four years.
He was ultimately insistent that the offshore structures were simply used to avoid enormous taxes on the machinery.
The sitting was then moved behind closed doors but is now back underway.
What do you think of the detail? Comment below