A team of forensic data experts have been combing through Pilatus Bank’s records for several months following allegations that it was a money-laundering machine, The Sunday Times of Malta has learnt.
Sources within the financial services watchdog, the MFSA, told the newspaper that an international company had been called in to investigate the beleaguered bank’s servers and single out suspicious transactions.
The probe could take several more months, the sources said.
They said that the authorities had ordered the investigation after a leaked report allegedly claimed the Ta’ Xbiex bank had been set up “deliberately for money laundering”.
In January Nationalist MEP David Casa said that a leaked Financial Intelligence Analysis Unit report which had been handed over to him by a whistleblower shed light on serious criminal activity at the bank. The information in the report, Mr Casa insists, goes beyond revealing how Pilatus Bank had flouted anti-money-laundering codes but suggests that processing irregular money was the main reason the bank had been set up.
It is all a lot more complex than what gets thrown around by the press
He handed the report to the European Banking Authority for investigation last year and sources said it was this that had prompted the MFSA to call in experts to review the bank.
Mr Hasheminejad, the Iranian behind Pilatus, is currently facing 125 years in jail after he was arrested on Monday by US authorities for alleged money laundering and sanctions violations. The bank has been in the national spotlight since allegations last year that Prime Minister Joseph Muscat’s wife Michelle held a Pilatus account that had received €1 million in kickbacks from Azerbaijan’s ruling dynasty.
Frustration at MFSA
The Malta Financial Services Authority has mostly remained silent in the face of the charges, battening down the hatches against a rising tide of criticism over the vetting carried out before Pilatus was allowed to operate on the island.
Sources within the watchdog gave The Sunday Times of Malta a rare glimpse into the “tense and frustrating” situation behind the secretive walls of the island’s financial fortress.
“One of the hardest things has been keeping quiet in the face of so much criticism – some of it fair, but some of which is pure speculation and politics,” one source said.
Questioned about due diligence carried out when the bank first applied for its licence back in 2013, the source said this had not been done by the MFSA but by auditing firms and an international company used by the authority’s EU counterparts.
“Look, the due diligence isn’t just something that someone in an office at the MFSA building can fudge or look the other way on. What people don’t know is that it goes through a series of checks – it is a process that involves third parties, not just the MFSA.”
But hadn’t concerns been flagged by the FIAU years ago? Sources were split on this. One senior MFSA official was quick to point out that international experts had been called in to look into “issues”, long before the bank had been thrust into the national spotlight – coming up with nothing that could be handed over to the police for criminal action to be taken.
Other sources, meanwhile, were either silent about the FIAU reports or said they could not vouch that irregularities had not been acted upon.
“This I can’t comment on – but I have my own concerns. What I can tell you is that it is all a lot more complex than the simplistic way it gets thrown around by the press,” one “frustrated” MFSA official said.
The sources went on to take exception to criticism that Pilatus’ licence was not revoked once Mr Hasheminejad had been arrested.
“That just isn’t the way these things work. We cannot go and shut down a bank like that – there is a process, this isn’t like shutting down a butcher’s shop. It is a complex process and can have ripple effects on the whole sector – the jurisdiction has to be protected,” one source said.