GUEST POST: On the FIAU’s findings into Adrian Hillman

GUEST POST: On the FIAU’s findings into Adrian Hillman

Another pertinent analysis from Godfrey Leone Ganado:

Adrian Hillman is in the news again. This may be the appropriate time to highlight the observations made by the FIAU in their leaked report regarding payments made through a host of companies beneficially owned by Keith Schembri and Adrian Hillman.

The report states: The FIAU carried out a financial analysis in accordance with the powers conferred to it under the Prevention of Money Laundering Act in relation to Mr Adrian Hillman who received funds from Mr Keith Allen Schembri. Mr Schembri is a person who falls within the definition of a “politically exposed person” under the Prevention of Money Laundering and Funding of Terrorism regulations in view of his appointment as Chief of Staff to the Prime Minister as from 11 March, 2013.

The FIAU is informed that Adrian Hillman is the ultimate beneficial owner of Lester Holdings Group Limited, a company which was set up in April 2011 and which is registered in the British Virgin Islands.

The FIAU is in possession of information indicating that Mr Hillman has received funds both personally and in the name of the BVI registered company from Mr Keith Schembri as well as from companies which are owned by or have Mr Schembri’s involvement.

Following the analysis of the facts available to the FIAU, together with other information obtained by the FIAU through the powers conferred to it by law, it has been determined that sufficient information is available to conclude that a reasonable suspicion of money laundering subsists in this case.

This decision is supported by the relevant facts outlined in this report.

As was outlined in the report, the FIAU was unable to identify a purpose or justification for the series of transactions from Mr Schembri to Mr Hillman raising serious doubts as to whether the transfers identified in favour of Mr Hillman could in fact constitute graft.

Conclusions

After having reviewed the information available to the FIAU, the following facts are considered to be of relevance in the determination as to whether a reasonable suspicion of money laundering subsists in this case:

  • The direct receipt of USD 169,675 from Mr Keith Schembri’s Swiss Bank account into the MFSP Financial Account of Mr Adrian Hillman for unknown purposes;
  • The direct payment of Euro 14,609 from Kasco Limited to Mr Adrian Hillman’s personal account in December 2011;
  • The direct payment of Euro 100,000 from Kasco Engineering to the MFSP Financial account of Mr Adrian Hillman held in the name of Lester Holdings Group Limited in November 2011;
  • The direct receipt of funds totalling Euro 121,924 between August 2011 and March 2015 from Mr Keith Schembri’s domestic companies’ accounts to domestic bank accounts held in the name of Lester Holdings Groups Limited. The majority of these payments were carried out through online banking in tranches of Euro 5,000 which therefore reduced the possibility of the remitting and beneficiary banks from requesting any supporting documentation in relation to these transactions;
  • The transfer of USD 135,884 to Adrian Hillman’s account with MFSP Financial from Malmos Limited, Keith Schembri’s company in Gibraltar. The FIAU holds no information as the purpose of these payments;
  • The business objectives for Malmos Limited state that the company is a wholesaler of paper products and that the company acts as stockist, merchant and agent whose products are then distributed to the printing industry. Such activity therefore raises the question as to why Malmos Limited transferred money to Mr Hillman’s investment account with MFSP Financial, given that the beneficiary is not a paper mill or a supplier of similar products;
  • The complexity of the set-up invoicing (1) a company registered in the British Virgin Islands (2) the opening of two accounts, one of which is with a private bank in Malta, (3) the opening of two additional investment portfolios, (4) the engagement of a foreign director, (5) the engagement of a nominee company incorporated in Panama to hold shares on behalf of the ultimate beneficial owner, is disproportionately cumbersome for the receipt of fully owed funds to Mr Hillman from Mr Schembri for any services/products the latter may have received.

On the basis of this information, it has been concluded that the circumstances surrounding the purpose of these payments merit further examination. In the event that it is discovered that Mr Schembri did actually pay Mr Hillman for services rendered or for the provision of goods, the reason why these payments necessitated the transfer of funds through a company registered in the British Virgin Islands (whose owners would not be able to be ascertained). It would also need to be determined why a company/y such as Lester Holdings Group Limited requires two bank accounts and an investment account with MFSP Financial.

Finally, and most importantly, an explanation will need to be provided for the fact that these funds never originated from Mr Schembri’s personal domestic accounts but rather from various domestic business accounts or offshore accounts held in jurisdictions which are known for strict secrecy laws.

In view of the above circumstances, the information available to the FIAU is deemed to be sufficient to conclude that a reasonable suspicion of money laundering and/or the existence of proceeds from crime subsists. It is therefore being recommended that this report be transmitted to the Police in terms of the Prevention of Money Laundering Act for any action the Police may consider appropriate.

ADRIAN HILLMAN AND ALLIED NEWSPAPERS – as reported on Malta Today

While on the subject of Adrian Hillman, it may be appropriate to highlight an internal inquiry held in March 2016 by Allied Newspapers on account of information that the managing director,

Adrian Hillman, was the owner of a British Virgin Islands company and could have received bribes from Mr Keith Schembri.

The inquiry stemmed from information and accusations by the Malta Independent columnist Daphne Caruana Galizia, resulting from Panama Papers Mossack Fonseca leak, that Adrian Hillman, Keith Schembri and developer Pierre Sladden, had a joint undertaking in offshore companies they opened in 2012.

As the Panama Papers scandal unfolded, documentation in the leak showed that the BVI companies individually owned by Keith Schembri, Pierre Sladden and Adrian Hillman were equal shareholders in a Cypriot company, A2Z Consulta.

It was also reported that both Schembri and Sladden were involved in some part of the Euro 30 million construction of Allied’s printing press Progress in 2011: Schembri provided printing machinery, while Sladden had been a sub-contractor on part of the construction works.

Allied reached a private agreement with Adrian Hillman concerning “any claims they have or may have had against each other. As a result, all litigation is being withdrawn”.

Reacting to this agreement, Keith Schembri issued a statement in reaction to the news, saying that the result proved there was no wrongdoing from his business group as had been alleged.

“The dishonest and highly politicised campaign against me personally has proved to be baseless. Now that this matter has been resolved, for the sake of transparency, I urge Allied Newspapers to publish its independent inquiry.”

PERSONAL OBSERVATIONS ON THE ABOVE

Why did the Prime Minister refuse to publish the list of local individuals or companies who were mentioned in Swiss Leaks?

Following from the above FIAU report, it is stated that Keith Schembri had a Swiss Bank account from which he transferred USD 169,675 to the MFSP account of Adrian Hillman for unknown purposes.

This is probably one of Joseph Muscat’s reasons for not publishing the Swiss Leaks list.

Why did Allied Newspapers not publish the inquiry report on the understanding that this was a private company?

In my opinion, the fact that a politically exposed person who happens to be the Chief of Staff of the Prime Minister is named, renders this report of public interest, now more than ever, as the blogger who divulged information of alleged graft has been brutally assassinated.

Sometimes I question why there is so much omerta’ around us.

Keith Schembri himself has urged Allied Newspapers to publish its independent inquiry. Is this a case of clutching at straws, or is it because he can take comfort that the report will not be published?

Keith Schembri says that the result proved there was no wrongdoing from his business group as had been alleged. He refers just to his business group. What about the transfers that he made from personal accounts?

Keith Schembri says that the result proved there was no wrongdoing……I ask: What result, if the report was not published?

How does Keith Schembri reconcile the conclusions he made with the conclusions of the leaked FIAU report?