“Police could have investigated Panama Papers”

A person holds a hand on a picture of Daphne Caruana Galizia during a demonstration to demand justice over the murder of the journalist, outside the Courts of Justice in Valletta, Malta, December 1, 2019. REUTERS/Yara Nardi

Tista' taqra bil- Malti.

Superintendent Antonvich Muscat and Superintendent Ray Aquilina testified before the Board of Inquiry on Wednesday afternoon.

The public inquiry into the assassination of journalist Daphne Caruana Galizia continued today before the Board of Inquiry composed Judge Emeritus Michael Mallia, who is chairing the inquiry board, and two other board members, Chief Justice Emeritus Joseph Said Pullicino and Judge Abigail Lofaro.

Former Police Inspector and FIAU investigator Jonathan Ferris who testified last month suggested that the Economic Crimes Unit failed to act in allegations of financial corruption.

Lawyers Jason Azzopardi, Therese Comodini Cachia, Andrew Borg Cardona and Peter Caruana Galizia are appearing for the Caruana Galizia family.

16:42 The court is adjourned to Wednesday at 2pm.
Monique Agius
16:38 Muscat left the stand.

Dr Comodini Cachia argued against the inclusion of Dr Victoria Buttigieg's inclusion in the inquiry. She explained that Buttigieg's presence in the courtroom would have a chilling effect on the witnesses.
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16:34 Muscat said that he did not have the proper software to go through bank statements. He added that he had to read every letter of hugely long documents manually with no assistance.

Muscat said that for them the priority was to establish who was behind 17 Black and whether there were any money transfers.

The witness said that he had never met or spoken to Keith Schembri and Yorgen Fenech in a reply to a question by Dr Azzopardi.
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16:20 Dr Azzopardi asked about the FIAU report on 17 Black; a PEP was set to receive a large sum of money, an attempt at opening bank accounts refused by eight banks in five different jurisdictions. He added that the origin of funds amounted to unbelievable excuses.

'The ECU has arraigned people who robbed a fast food outlet of €40,000 and used it to buy furniture and were jailed. With all these facts, is there not enough facts to send for Konrad Mizzi and Keith Schembri and ask for an explanation at least?' Dr Azzopardi.

'The biggest difference was that the money did not transfer money,' Muscat replied.

'So what!' Dr Azzopardi said, referring to the laws he said that in these crimes the attempt is the same as the consummated crime.

'There is no disclosure by the foreign jurisdictions,' protested the witness again.

Dr Azzopardi pointed out that in other jurisdictions the Panama Papers led to arraignments. He asked whether no one will be arraigned if Dubai continued to ignore their requests.

The witness replied that he believes that eventually Dubai would cooperate.

Dr Azzopardi referred to the documents seized from Fenech's house and office related to 17 Black.

Asked about MacBridge he said that they never came across any information on the company except for the mention on the Panama Papers.
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16:15 Muscat said that key jurisdictions were not cooperating with the Maltese authorities.

Asked which, Muscat said that it was Dubai. He explained that the Ministry of Justice received an unopened envelope which was sent by the Maltese authorities.

A visit to Dubai to discuss this matter was cancelled by Dubai at the last minute, Muscat said.
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16:13 Dr Comodini Cachia asked about the police procedure when they arraign someone before the court.

Muscat said that he will only arraign and prosecute when he is morally convinced that the person will be convicted. He said that other officials choose to prosecute and people end up being acquitted.

'One prosecutes because they're convinced on winning the case?' Dr Comodini Cachia asked.

'I can't really reply to this question,' Muscat told the Board.
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16:06 Muscat insists that despite red flags were raised, there was insufficient evidence.

Dr Borg Cardona asked whether they investigated the loan and whether they were sent for.

'I was an inspector at the time and I didn't receive those instructions,' Muscat said.

Muscat has never interrogated Schembri or Tonna on the matter.

'Since its inception, the situation was not normal. I did not receive the file, but an analytical report,' Muscat said.

'Who was meant to give you the file?' Dr Azzopardi asked.
'Superintendent Ian Joseph Abdilla,' the witness replied.
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16:01 Muscat said that in the case of Brian Tonna and Willerby, there was insufficient evidence to prosecute. He said that Tonna passed on €100,000 to Keith Schembri in two payments of €50,000. There was insufficient evidence that there was a kickback to Schembri to provide two Russian nationals with a passport, he said.

Azzopardi said that when a Prime Minister Chief of Staff receives a six figure sum. Does this not a raise red light?

'It does but it was part of a loan…' Muscat explained.

'Despite the Code of Ethics which says that an auditor should not lend money to its client, especially in such a position. Does it not flash a red light?' Dr Azzopardi asked.

'It did, but there was insufficient evidence,' Muscat said.
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15:58 Dr Azzopardi asked what was the difference between Operation Green and Operation Green Power.

Operation Green was the report by Manfred Galdes. This file has the FIAU report by Galdes.

Operation Green Power is an FIAU report concerning Konrad Mizzi, Keith Schembri and 17 Black. He explained that this dealt with the information they had collected, the FIAU report which now form part of magisterial inquiry.
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15:57 'No one has ever instructed me to investigate Panama Papers,' Muscat said.
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15:50 Asked about 17 Black, he said that he had also met with Abdilla and Aquilina. Requests were sent through Europol and Interpol to various jurisdictions. Few authorities replied since the information concerned private and banking related information. A few requested rogatory letters.

Asked about 17 Black, he said that there were local persons who had structures and bank accounts in foreign jurisdictions. 'The main players were Konrad Mizzi and Keith Schembri,' Muscat said.

'Are we talking about an attempt at money laundering?' Chief Justice Emeritus Said Pullicino asked.

He said that there was lack of information, even for the predicated offence – in this case corruption.

Chief Justice Emeritus expressed his worry saying that there seems to be the impression in Malta that journalism could not reach some form of evidence in and of itself.

Muscat told the board that following the Panama Papers, the FIAU issued a report.

'Technically the police could have investigated on the Panama Papers, but it did not happen. I did not receive any instructions,' Muscat said in a reply to a question by the board on whether the police could have conducted an investigation parallel to that of FIAU.
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15:49 The board chairman asked about Operation Green. Muscat said that he heard only recently about Operation Green and this concerned the first file.

He had initially thought that 'Operation Green' was 'Operation Green Power', however, it was clarified that the latter concerned a third report.
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15:43 After a short break, the second witness took the stand, Superintendent Antonvich Muscat.

The report on Willerby, Brian Tonna and Schembri was received by Muscat in July 2016. He explained that he was tasked to read the report. Muscat, Abdilla and Aquilina discussed the report and a way forward in a review.

He recalled issuing letters to Pilatus Bank and ID Malta among others.

Muscat explained that there was a meeting with FIAU for which Alfred Zammit, Ian Abdilla, Manfred Galdes and himself were present. 'There were issues which cropped up after the Panama Papers,' Muscat explained. Since the information was still coming in, the investigation was divided into three.

He said that he never saw the file which Cassar had received.

Muscat told the Board that he only received the analytical report remarking that this was not normal, since in such cases the report would come in a file.
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15:23 'I didn't conclude because I didn't receive the file or any directives to act on the files,' Aquilina explained.

The file is currently at the Assistant Commissioner Ian Abdilla.

Dr Azzopardi asked whether it was normal to be so restricted in this case.

'It is an exception that one is restricted and given such specific directives on a particular file,' Aquilina told the Board.

'May be he was seeing the wider picture…' Aquilina said.

Dr Azzopardi asked whether Yorgen Fenech and Keith Schembri had approached him.

He said that he had to deliver the notification to Yorgen Fenech to testify before the magisterial inquiry to, other than that he never spoke to Fenech. He never spoke to Schembri.
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15:18 Aquilina was asked about the staffing levels at the ECU. He said that he was sent to assist the sole officer there at the time Antonvich Muscat. He ended up alone in the unit.

Aquilina said that resources were scarce at the ECU and he had a huge backlog. He spoke about a month where the anti-money laundering squad was composed of six officials.

The squad which Aquilina heads is composed of four police inspectors and two financial analysts as of 2018.

"We were anticipating the MONEYVAL results," Aquilina said.
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15:14 The FIAU made a report in March 2018, on a story written by Daphne Caruana Galizia, about Adrian Delia making money from prostitution in the UK through a UK Bank. The investigation is still ongoing.

Dr Azzopardi asked why Chris Cardona was not included in this investigation since Caruana Galizia had written about it. He replied that he was not involved in this case.

The Superintendent said that to his knowledge there was no magisterial inquiry on this.
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15:12 'Some investigations were based substantially on her work,' Aquilina said.
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15:06 Dr Azzopardi asked about Daphne Caruana Galizia's work on money laundering and bribery, and whether it was relevant to their work.

Aquilina replied that there was an investigation on a particular person that there was an allegation on money laundering.

The witness had investigated the case along with another police official in June 2016. The investigation was completed until September 2016. He explained that while there was enough to take action, one could not because of prescription.

Asked about Caruana Galizia's work, Aquilina said that 'yes, substantially she was correct in her work on this, however there was the problem of prescription.
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15:01 In January and February, the witness said that rogatory letters were sent. The letters were sent to Latvia and Dubai (UAE). He explained that Latvia cooperated while the authorities in Dubai has not yet replied. Aquilina referred to revelations in the media, which said that 17 Black had possibly changed its name and there were two bank accounts.

Aquilina who was in charge of drafting these rogatory letters, said that they were amending the letters sent to the authorities in Dubai. One such amendment concerned a bank account which had a missing digit.

Dr Azzopardi asked what the protocol was when the FIAU reported reasonable suspicion of money laundering.

The report is received by the liaison officer, in this case Ian Abdilla, would open a police file and indexes it. It is then assigned to an inspector. Aquilina would take note of who is assigned that particular file.

'There were cases in which the files were not given to me,' Aquilina said. He added that he only got to know recently about this.
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14:52 Dr Comodini Cachia asked whether it was MFSP, the financial institutions asked to clarify something. Aquilina confirmed.

In July 2016, he received the report on Keith Schembri, Brian Tonna and Willerby Inc., which he read and passed back to his superior. The report was received without a file.

Dr Azzopardi asked whether a file on 17 Black was sent to Abdilla in November 2018. Aquilina explained that the report on 17 Black was passed on to his superiors he was going on long leave.

'I had to retrieve the file from Abdilla to update it on the proceedings of the magisterial inquiry. I documented who was called to testify,' Aquilina said. He then returned the file to his superior on 2 December 2019 before he went on a trip abroad.
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14:48 The witness was asked to explain in his own words how Konrad Mizzi, Keith Schembri and 17 Black are linked according to the report.

'The report is a time frame,' Aquilina said. He explained that the report contained information about trips abroad, use of credit cards, and transfers.

Madam Justice Abigail Lofaro asked whether they had sufficient evidence to prosecute anyone.

'To date I don't have anything in hand with evidence and say that you did such and such a crime,' Aquilina said.
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14:45 Dr Comodini Cachia asked the witness to clarify whether the global report dealt 17 Black alone or whether it concerned Schembri, Tonna, etc. after he gave the same date for the global file and the report on 17 Black.

He explained the three reports. The analytical report which arrived on 2 November 2016 concerned Hillman.

'Keith Schembri's name kept coming up even in the final report,' the witness said. 'There are other persons of interest,' Aquilina told the Board.
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14:39 Lawyer Jason Azzopardi referred him to what he said earlier that "to this day, no one has spoken to him yet". This concerns a report on Keith Schembri.

The FIAU analytical report arrived at the Economic Crimes Unit on 2 November 2016. Dr Azzopardi asked whether his superiors had spoken to him from that date, to which he replied 'no'.

Azzopardi asked the witness to explain about the global file. He said that global file arrived on the witness' desk in March 2018.

Asked by Dr Azzopardi whether his superiors have spoken to him about the global file, Aquilina replied that the investigation is still underway.

'The last time we spoke about it was 3 months ago,' the witness said.
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14:38 Aquilina said that he is following the magisterial inquiry before Magistrate Natasha Galea Sciberras. This magisterial inquiry concerns Keith Schembri and the alleged kickbacks.
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14:35 Aquilina said that he worked on the Schembri and Hillman report and this was passed on to his superiors. He said that he did not know if any action was taken at all.

'Did he send for them? Was there enough to send for the persons of interests?' Madam Justice Abigail Lofaro asked.

'I don't know,' Aquilina said.

The witness said that further rogatory letters have been sent to other jurisdictions. He said that there is an ongoing inquiry which is in an advance stage. The last sitting was held in January.
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14:32 When asked about the way forward, Aquilina explained that they decided to use the police channels available to the Force. Through these channels the police sought further information from foreign jurisdictions. The police sought the advice of the Attorney General lawyer Elaine Mercieca Rizzo. The rogatory letters were drafted and tabled them in the inquiry, Aquilina explained. This was done so if in the future it emerges that there was a crime, this would preserve the evidence.
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14:24 In his letters which were issued to the financial institutions, Aquilina asked for all the information they held on the individuals of interest. He said that there were some four boxes of information. In one case, he asked an institution to clarify.

Aquilina said that he worked on the file until 20 January 2017, saying that he did not hear anything else about the file. 'Normally, my superior would direct me on what to do next,' Aquilina said.

He referred to a magisterial inquiry. Madam Justice Abigail Lofaro pointed out that a magisterial inquiry would hinder any police investigations.

'I was asked to attend a meeting at FIAU with Abdilla and Antonvich Muscat on 3 May,' Aquilina told the board. He explained that the police had called the meeting with the FIAU to see what the FIAU was working on. The analysis was still pending but this gave an idea that the reports would be split into three; one on Keith Schembri, Brian Tonna and Willerby, the other on Schembri and Hillman and other global report, Aquilina explained.

The report was completed and was received on 28 March 2018. The report dealt with 17 Black.

Aquilina said that he read the report and passed it on to Antonvich Muscat to discuss the way forward.
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14:20 The board referred to a report which was passed on to the police in 2016. The report concerned Schembri and Hillman. Assistant Commissioner Ian Abdilla instructed the witness to read the file and issue letters.

'When I received an analytical report from FIAU, I read it and issued the letters as instructed,' Aquilina explained. He added that when the replies came in, he opened a file and passed on the information to Abdilla for further direction.

'From that day, I've never seen the file again,' Aquilina told the Board.

'I didn't suggest anything,' Aquilina told the Board following a question by Madam Justice Abigail Lofaro asking if he had put any recommendations forward.
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14:15 Superintendent Ray Aquilina testified first. Superintendent Aquilina forms part of the Anti-Money Laundering Squad of the Police.

The witness said that he has been at the squad since 2009 where he started off as police inspector. He told the court that his superior was Assistant Commissioner Ian Abdilla who was appointed in 2016.

Judge Emeritus Michael Mallia asked about the report on Willerby. Aquilina told the board that he was instructed to read the report and return it. When asked who was heading the police force, he replied that until April it was Michael Cassar, then it was Lawrence Cutajar.

The witness told the court that he only got to know about Operation Green later.
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14:13 The Board of Inquiry entered the courtroom. Judge Emeritus Michael Mallia informed that the Board received a letter from the AG from Dr Victoria Buttigieg (State Advocate) requesting to represent the state in the proceedings.
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14:11 Newsbook.com.mt is reporting live from courtroom 20.
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