Issue link: https://maltatoday.uberflip.com/i/1371118
6 maltatoday | WEDNESDAY • 12 MAY 2021 NEWS KARL AZZOPARDI KEITH Schembri's father, Alfio, had told police that he would be asked to sign documents but did not know what they were, the court heard this morning. The information comes from the testimony of Inspector Leanne Bonello in the compi- lation of evidence against the Schembris and two other men accused of various financial crimes, including money laun- dering, fraud and corruption. Keith Schembri was excused by the magistrate after being hospi- talised on Monday with a serious medical condition. Bonello told the court that dur- ing police interrogations, Alfio, confirmed that he had received a monthly salary from the Kas- co 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 doc- uments, Alfio Schembri did not know what they were about. The documents included transac- tions, bank statements and wag- es," the inspector testified. An analysis of Alfio Schembri's bank accounts showed a number of transaction from Kasco and re- lated companies. Payments from his account to Keith Schembri's accounts were also found. Bonello said financial controller Robert Zammit, one of the ac- cused, 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 fa- ther), who would in turn donate it to his son. The fourth accused is Malcolm Scerri, a business partner to Keith Schembri. The criminal proceedings start- ed after a magisterial inquiry probed the sale of printing equip- ment 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 Buha- giar - to secure the printing ma- chinery contract. Several other people, including Schembri's accountants at Nexia BT, investment managers at Ze- nith Finance and a former Pro- gress Press director, are also fac- ing charges of money laundering. Hillman is in the UK and police have initiated the process to ex- tradite him. The case is being heard by Mag- istrate Donatella Frendo Dimech. Money laundering case: Keith Schembri's father would be asked to sign documents he had no knowledge of US sanctions no obstacle to HSBC funds held by Darren Debono, court rules Alfio Schembri, the father of Keith Schembri, has also been charged as a director of his son's companies Darren Debono MATTHEW AGIUS US Treasury Department sanctions against former professional footballer and suspected fuel smug- gler Darren Debono cannot stop a locally registered assurance company from releasing funds to him, according to a ruling by the First Hall of the Civil Court. Debono is the subject of investigations over alleged fuel smuggling. The US had imposed sanctions against Debono and three other Maltese in Febru- ary 2018. As a result, HSBC Life Assurance (Malta) had re- fused to release funds held on behalf of Debono with them under a Savings Plan and a Private Retirement Plan. The bank argued that since its parent company's shares are listed on the New York Stock Exchange, it was therefore prohibited from releasing the funds, as its parent company is regulated by US law. HSBC had also argued that the Malta Financial Services Authority had urged local companies to observe the US sanctions, citing the wide-ranging applicability of the measures and the risk of "signifi- cant financial actions which may have serious impli- cations on their business activities." In a judgment handed down yesterday, First Hall of the Civil Court, presided by Mr Justice Grazio Mer- cieca, said it agreed with a previous court judgment in favour of Debono that had authorised the release of funds to a company in similar circumstances. The judge in that case had ruled that sanctions imposed by another country did not have an effect on Malta, being a sovereign country. The judge said that this case was rather different in that the request was being made for the release of funds by an assurance company controlled by a parent company listed on the New York stock ex- change, bringing with it the risk that the company could incur large fines and its directors held crimi- nally responsible in the United States. Despite the differences, however, the court said, this did not change the fact that the life assurance company was established under the laws of Malta and was therefore subject to the laws of Malta, not another other country's. Mr Justice Mercieca said he also agreed with the reasoning of the court in the prior case that the sanctions situation was not part of the contractual relationship between the client and the bank, and now the assurance company. He noted the assurance company had not demon- strated that the sanctions had been incorporated into Maltese law. The court however also noted that Darren Debono's assets were under a freezing order issued by a Maltese court on November 25, 2020. The freeze was ordered as part of criminal pro- ceedings against Debono and others over allegations of money laundering and smuggling. As a result, the court ruled that the funds request- ed by Debono must be released by the life assurance company - but only once the local freezing order is revoked.