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Police ‘gather own information’ on all FIAU reports

No information from FIAU’s reports can be used to interrogate persons or as evidence

The FIAU on Keith Schembri: “A reasonable suspicion of money laundering”

The FIAU on Keith Schembri: “A reasonable suspicion of money laundering”

The police analyse, verify and gather their own information on all the reports that are passed on to them by the Financial Intelligence Analysis Unit, the Sunday Times of Malta has been told in an official reply to questions.

The reply calls into question why the police, by the Police Commissioner’s own admission, never investigated two leaked FIAU reports describing a suspicion that the Prime Minister’s chief of staff, Keith Schembri, was involved in money laundering.

Read: FIAU reacts as David Casa says new report leaves ‘no choice' but for Mizzi, Schembri to be removed

According to data tabled in Parliament recently, the FIAU handed the police 144 reports of suspected money laundering or terrorism financing between the start of 2013 and the end of November 2017. The highest number, 39, came in 2016.

The Sunday Times of Malta asked how many reports were investigated, how many investigations had been completed and what the outcomes were.

Read: FIAU reacts as David Casa says new report leaves ‘no choice' but for Mizzi, Schembri to be removed

The questions were sent in the light of the failure of the police to investigate what the FIAU had found to be “sufficient evidence to conclude a reasonable suspicion of money laundering and proceeds of crime” in two reports on Mr Schembri. The reports, which called for a criminal investigation, were sent to the police in July and November of 2016.

Speaking to a delegation of MEPs in Malta on a fact-finding mission last December, the Police Commissioner admitted the reports had been registered but not investigated. He cited the “limited competences” of the police as one reason.

Yet the police reply to questions from The Sunday Times of Malta made it clear that the police were meant to “analyse and take all necessary steps to verify” every case referred to them by the anti-money laundering agency, FIAU.

The police spokesman pointed out that no information from the FIAU’s reports can be used to interrogate persons or as evidence in court.

But what happens is that “on every report, the police must gather the information again from Malta and abroad through judicial or police channels, or from other official contacts, so that it can build a case before taking further action”.

A legal source pointed out that when passing on information to the police, the FIAU not only includes a report with information but also a set of annexes containing all the evidence collected.

All the police need to do is verify that the annexes presented by the unit are authentic – a process that that does not take very long, since all the evidence will have already been compiled.

The police did not answer the questions regarding the number of reports they had investigated and investigations they had completed, with the spokesman saying that money-laundering investigations are confidential so it would not be prudent to disclose certain information.

“Although it must be understood that not all cases that the police consider solved result in criminal procedures in the Maltese courts,” he added.

Last year, following months of inaction by the police over the FIAU reports, then Opposition leader Simon Busuttil triggered separate magisterial inquiries into the two cases that involve Mr Schembri.

One of the inquiries surrounds payments totalling €650,000 that allegedly passed from Mr Schembri to former Allied Newspapers managing director Adrian Hillman, and the other centres on a suspicion that Mr Schembri received a €100,000 kickback from the Individual Investor Scheme through audit firm Nexia BT’s Brian Tonna.

Police ‘took action’ on Schembri reports

The police took all the necessary action to gather information on two FIAU reports calling for a criminal investigation of the Prime Minister’s chief of staff, Keith Schembri, Home Affairs Minister Michael Farrugia has told Parliament.

Replying to a question from PN good governance spokesman Simon Busuttil, Dr Farrugia said, however, that when the two reports were passed on (by Dr Busuttil) for magisterial inquiries, the police felt it better to await their outcome. Numerous experts were assigned to the inquiries.

Prime Minister Joseph Muscat has said Mr Schembri would need to resign if criminal charges were pressed against him.

The two leaked FIAU reports concluded that there was a reasonable suspicion Mr Schembri had been involved in money-laundering activities. One of the reports said that the facts surrounding a €100,000 transaction between Mr Schembri and his friend and auditor Brian Tonna could only be determined by a body having law enforcement powers.

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