Lawyers of former Prime Minister’s chief of staff Keith Schembri insisted that there was no proof that their client was involved in alleged kickbacks from the citizenship-by-investment scheme.
According to a report in The Times of Malta, the lawyers questioned why their client’s assets were frozen, saying that the measure was draconian.
“There is no smoke without a fire,” replied Fiorella Fenech Vella, from the State Advocate’s office.
She said that an investigation was still underway.
Schembri, who testified in the case, told the court that his business could close within a month because of the court order.
He said he was facing difficulty paying his employees and in dealing with insurers. There are roughly €300,000 in cheques that cannot be deposited.
Employees of companies owned by former OPM Chief-of-Staff Keith Schembri have received their wages after Attorney General Victoria Buttigieg retracted a section of an asset freeze order that preceded his arrest.
An independent administrator, agreed upon by the AG and Schembri, will soon be appointed.
Schembri and Nexia BT’s Brian Tonna, Karl Cini, and Manuel Castagna were arrested over money-laundering allegations involving kickbacks from the investment-for-citizenship scheme launched under former Prime Minister Joseph Muscat.
This came after an inquiry into alleged kickbacks from the citizenship-by-investment scheme. Schembri was reported “given the disclosure of evidence” before being released, meaning he was given access to the conclusions of a magisterial inquiry into the alleged money laundering. The inquiry was concluded earlier this month.
According to a leaked report by the Financial Intelligence Analysis Unit (FIAU), Tonna transferred two €50,000 payments through Pilatus Bank to Schembri in what is believed to have been part of a kickbacks scheme.
Both men have denied any wrongdoing and said the €100,000 was the repayment of a personal loan given to Tonna by Schembri while the former underwent separation proceedings.
The loan was repaid through Willerby Trading, a British Virgin Islands shell company secretly owned by Tonna.
The same FIAU report also raised suspicions of the loan document presented to the bank to justify the payments after finding no trace of the original loan payment by Schembri to Tonna.
The four men are currently out on police bail. They are yet to be charged with a crime.
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