The leaked Financial Intelligence Unit documents published by Opposition leader Simon Busuttil during Friday’s debate with Prime Minister Joseph Muscat on Xarabank have shed a lot more light on the sordid accusations that the prime minister’s chief of staff is facing in the kickbacks from citizenship scandal.
On 25 April, Dr Busuttil alleged that accountant and Panama company fixer Brian Tonna, whose firm is a Maltese citizenship agent, received €166,800 from three Russians for the sale of Maltese citizenship through the Individual Investor Programme. The funds were passed into an account at Pilatus Bank belonging to Mr Tonna’s British Virgin Islands company Willerby Trade Inc as consultancy fees. Soon after, two equal payments of €50,000, amounting to a total of €100,000, were transferred to Keith Schembri’s Pilatus Bank account.
He said that the “ridiculous excuse given by Mr Schembri and Mr Tonna was that Mr Tonna was repaying Mr Schembri for a loan he gave when he was separating a few years ago. As if Brian Tonna needs someone to loan him €100,000.”
In fact, from the FIAU report published by Dr Busuttil on Friday, it transpires that the FIAU had taken an even bleaker view to the loan alibi.
The justification provided to the bank’s officials for the transfers from Tonna to Schembri was that the loan was “as assistance with personal finances during separation proceedings of the Borrower.”
A loan agreement, an assignment approval and an assignment of loan agreement dated 12 March 2012, 12 January 2015 and 2 February 2015 respectively were presented to the bank as documentary evidence to support these transactions and the FIAU notes that Mr Tonna had separated from his wife on 13 August 2014.
But, it adds: “A review of the deed of separation, together with an examination of public registry searches on the individual concerned reveal that he appears to be sufficiently wealthy to handle the costs of personal separation proceedings without needing third party funding.
“Moreover, it should be noted that even though certain circumstances might lead to temporary liquidity problems, the figure of €100,000 seems to be much higher than what would normally be needed for a person to undertake personal proceedings in Malta.
“Even more importantly, the arrangement entered into raised certain basic questions that can only be answered by the persons concerned. The first of these questions is why the repayment of a loan seemingly granted by one individual to another, unsecured, interest free and for personal reasons, required such an elaborate and costly set-up involving the use of a company incorporated in the British Virgin Islands.”
It adds: “Moreover, in view of the circumstances surrounding this loan agreement, it cannot be excluded that the agreement might have been drawn up more recently and backdated in order to justify the transfers to Mr Schembri.
The FIAU said it had carried out an in-depth review of several bank accounts held by both men and by companies they were connected in different credit institutions but that “it was not possible to identify a transaction or a series of transactions through which the original loan was granted to Mr Tonna.”
The report adds that “…even though it cannot be excluded that the funds might have been transferred through alternative channels or in cash. Although efforts were made to examine all potential avenues, these facts can only be determined conclusively through a investigation by a body having law enforcement powers.
“Although the FIAU is not in a position to determine these matters itself, a police investigation could reveal the date when this document was actually drawn up, especially in the event that the computer servers of BT International Limited/Nexia NEXIA [firms owned by Mr Tonna] are examined.
“If it is determined that the date of the drawing up of the loan agreement is close to the date of its presentation to the bank as a justification for payment, then it would be much more likely that the loan is a fictitious one.”
The FIAU said it was “unable to identify a transaction or a series of transactions which could confirm that Mr Schembri did in fact lend money to Mr Tonna, raising serious doubts as to whether the transfers identified in favour of Mr Schembri could in fact constitute a repayment of a loan or whether this was a bogus loan.”
On the ethical questions attached to the loan, let alone the other clear findings that kickbacks from the sale of Maltese passports were being orchestrated, the FIAU notes, “This report will not enter the merits of whether it was or was not appropriate for a loan agreement to be entered into between the Managing Partner of an auditing firm and the main shareholder of a large group of companies which has been its audit client for several years. Whether it is ethical or otherwise to do so and whether this provision of services is in breach of international audit standards falls outside the scope of this report.
“Nonetheless, the fact that certain lines might have been crossed should still be looked into by an investigator, especially once it is evident that the two persons concerned appear to have had no qualms about compromising their professional career and the reputation of their business in order to proceed with these agreements.”