Keith Schembri in hospital as court continues to hear evidence in money laundering, corruption case

Keith Schembri was hospitalised on Monday, and was receiving treatment for a serious medical condition.

Schembri was not in court yesterday when the case against him and others concerning financial crimes continued being heard.

His lawyer Edward Gatt, broke the news of Schembri’s hospitalisation when he informed the court that the former chief of staff in the Office of the Prime Minister could not attend.

Gatt asked the magistrate to excuse Schembri because he was hospitalised. He will neither be able to attend Wednesday’s sitting.

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The lawyer also asked the court for permission to allow Schembri’s father, Alfio, to be exempted from attending the sittings so he can be by his son. The court accepted both requests.

Schembri, his father and two associates from the Kasco Group, a company belonging to Schembri, are facing various financial crime charges, including money laundering, corruption and fraud.

During the sitting, it emerged that Keith Schembri’s father, Alfio, had told police that he would be asked to sign documents, but did not know what they were.

The information comes from the testimony of Inspector Leanne Bonello.

Bonello told the court that during police interrogations, Alfio confirmed that he had received a monthly salary from the Kasco Group for the last 10 years. He had started the company and then passed it on to his son, Keith.

Bonello said Alfio told police he had no say in how the company was managed as director.

“When shown a number of documents, Alfio Schembri did not know what they were about. The documents included transactions, bank statements and wages,” the inspector testified.

An analysis of Alfio Schembri’s bank accounts showed a number of transaction from Kasco and related companies. Payments from his account to Keith Schembri’s accounts were also found.

Bonello said financial controller Robert Zammit, one of the accused, had told police he followed orders and was never involved in the Progress Press printing press project.

Zammit told police that after Keith Schembri was made chief of staff at the Office of the Prime Minister in 2013, Schembri’s wage would go to Alfio (his father), who would in turn donate it to his son.

The fourth accused is Malcolm Scerri, a business partner to Keith Schembri.

The criminal proceedings started after a magisterial inquiry probed the sale of printing equipment by Kasco to Progress Press when the latter moved into the new printing press in Mrieħel.

Keith Schembri is accused of passing on backhanders to two directors at the Allied Group – Adrian Hillman and Vince Buhagiar – to secure the printing machinery contract.

You can re-live proceedings from court below.

, Keith Schembri in hospital as court continues to hear evidence in money laundering, corruption case

11:21 The sitting will continue tomorrow at 9:00am.

11:20 She steps off the witness stand. That’s it for today.

11:20 No information was found on Kasco Engineering, GSV Company Limited, Holdporth Limited, Malmos Limited, Its Good Ltd, Colson Services, Selson Holding Corporation, Techne Industrial Limited, Burner Malta Limited. Tug Zone Limited had two allotments of shares and three share transfers.

11:07 She also lists capital transfer deals involving the companies. Kasco Holdings Limited had five allotment of shares and six transfer of shares. Kasco Limited had two contracts and one promise of sale agreement

11:06 Josette Galdes, a representative of the Capital Transfer Duty section within the Tax Commissioner’s office takes the witness stand. She lists the share transfers and property sales the accused were involved in: Malcom Scerri had three share transfers; Alfio Schembri had two contracts and nine share transfers; Keith Schembri had four share transfers, four contracts and one allotment of shares; and Robert Zammit had two contracts.

11:04 VAT department representative Vincienne Vella takes the stand. She presents documentation related to the directorships and companies registered with the department linked to the accused.

10:52 Accountancy board representative Martin Spiteri takes the stand. He says Robert Zammit has a valid accounting licence which he paid yearly.

10:51 Debono steps off the witness stand

10:43 Keith Schembri’s tax payer registration, tax liability statements and other relevant documents are also submitted. The tax official says that Schembri was a non-filer for the year 2020.

10:39 Joe Debono from the Tax Commissioner’s office takes the witness stand. He presents Robert Zammit’s tax payer registration form and tax liability statement. Presenting a summary of tax payments between 2006 and 2020, Debono says Zammit did not pay taxes for a number of years during the period.

10:34 Miriam Azzopardi from the Malta Stock Exchange takes the witness stand. She says Robert Zammit has no account with the MSE. Alfio Zammit has two accounts, one is empty, while the other has an active balance. She steps off the witness stand.

10:26 Joe Saliba from JobsPlus takes the stand. He presents the employment history of the accused.

10:26 Claudette Fenech from the Registrar of Companies takes the witness stand and presents a list of the involvement of the four accused in Maltese-registered companies. She says companies like Malmos Limited, an offshore company, had no involvement in Malta.

10:23 The magistrate says she had already given a decree in which she had appointed the administrator, and that it was self-explanatory. Aloisio steps off the witness stand.

10:18 The court is discussing Aloisio’s role as administrator after he raised concerns over his role. He insists that there are difficulties with administering the company without executive powers. “It’s difficult to administer a company that is still trading,” he says. Aloisio adds that he needs an “enormous team” of people to carry out the work.

10:08 Two boxes of documents have been submitted as evidence on the transactions.

10:06 Aloisio points out that his role was that of supervising the transactions, rather than administering the company, saying that a board of directors still exists. “I just supervised transactions, rather taking administrative decisions,” he tells the court.

10:05 Administrator Raphael Aloisio takes the witness stand. Last November he was appointed by the court to administer the companies under attachment order. He had told the court about the difficulties surrounding the administration of such companies. The main aim was to ensure that normal transactions are still carried out. They were tasked with compiling a list of “prohibited transactions”, a list of “normal transactions”, a list of “emergency transfers” and to present a report on their work during the attachment order.

10:04 Farrugia steps off the witness stand.

10:03 Keith Schembri also received dividends of €120,000 from Kasco Recycling and €200,000 from Kasco Engineering.

09:54 The witness says that Keith Schembri received a number of cheques, 15 of which came from Alfio Schembri. He also received an additional 40 cheques, which had been issued from Kasco Group by Alfio Schembri. The cheques were cashed into Keith Schembri and his wife’s accounts.

09:50 The police constable also says that Keith Schembri also has two joint accounts with his wife Josette.

09:49 Investigations showed that Keith Schembri had income as chief of staff, CEO of Kasco Holdings limited, and as a consultant with Kasco Engineering on a part-time basis. He also received company dividends.

09:46 Police constable Andrea Farrugia takes the witness stand. He was assigned to a task force to analyse bank accounts of BTI Management limited, as well as Keith and Alfio Schembri.

09:45 Inspector Leanne Bonello steps off the witness stand.

09:45 Alfio Schembri told police that he would be asked to sign documents, but he did not know what he would be signing.

09:45 An analysis of Alfio Schembri’s bank accounts showed a number of transactions from Kasco and related companies. Payments from his account to Keith Schembri’s accounts were also found.

09:40 When shown a number of documents, Alfio Schembri did not know what they were about. The documents included transactions, bank statements and wages.

09:40 The police inspector says that Alfio Schembri confirmed that he had received a monthly salary from Kasco Group, for the last 10 years. He had no say in how the company was managed as director. Alfio told police it was him who started the Kasco Group, and Keith Schembri had taken over.

09:38 She moves on to Keith Schembri who gave a statement in December 2020. Schembri had told police that he had no knowledge of the BOV ‘900 account’. He had also been asked on the relationship between him and his father, where he said that he received a cheque on a monthly basis for “him and his wife”.

09:37 Bonello continues recounting what Zammit told police. The Kasco Group financial controller had said that the printing press profits were shared among the partners.

09:27 Bonello says that Zammit told police that after Keith Schembri was made chief of staff at the Office of the Prime Minister in 2013, Schembri’s wage would go to Alfio (his father), who would in turn donate it to his son.

09:26 She says that financial controller Robert Zammit confirmed his involvement in the Kasco Group. He informed inspectors that he followed orders, but was never involved in the Progress Press printing press project.

09:24 Inspector Leanne Bonello takes the stand. She will be testifying on investigations under her remit.

09:23 Dr Andrea Zammit from the AG’s office informs the court that the prosecution wants to present its inquiries. The inquiry requested by former Opposition leader Simon Busuttil in 2017 is presented. Court registrar Liandra Zerafa presents the procès-verbal on electronic devices seized by the police’s financial crimes unit.

09:18 Dr Katja Vassallo who was tasked with transcribing Keith Schembri’s statement to the police presents the transcript.

09:13 Lawyer Edward Gatt informs the magistrate that Keith Schembri has been hospitalised. Gatt informs the magistrate that Schembri will not be able to attend tomorrow’s sitting either. He also requested Schembri’s father, Alfio, not attend the sitting so he can accompany his son. The court accepts the requests.

09:09 Magistrate Donatella Frendo Dimech enters the courtroom.

08:59 Keith Schembri, his father Alfio, business partner Malcolm Scerri and financial controller Robert Zammit face charges of money laundering, fraud, forgery and corruption. The case revolves around printing equipment that Schembri’s company sold to Progress Press when they moved to their new premises in Mrieħel. Police have pressed charges over what investigators believe is a case of corruption in the private sector when Schembri paid backhanders to two directors at the Allied Group to win the contract.

08:45 We are hearing that the start of today’s sitting has been delayed by a bit.  It was meant to start at 8:30am, but it will now start at 9am instead. What’s certain is that the case will go on, even if Schembri is not physically present in the courtroom.

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