This is the concluding analysis in Godfrey Leone Ganado’s 10-part review of the findings of the Egrant inquiry:
Background
An analysis of 49 pages of the conclusions of the magisterial inquiry report containing around 1500 pages, which was published by the Attorney General, and a copy of which, he gave the Prime Minister probably not in accordance with law.
The full report remains unpublished, and the Prime Minister’s personal lawyer, Dr Pawlu Lia is now redacting the report, on the instructions of the Prime Minister, with the declared intention of publishing it in a redacted form. The Attorney General and several legal minds are all against a redacted release. I am informed the magistrate who wrote the report and police investigators are also opposed to the idea of a redacted report.
One source, a sitting member of the judiciary, explained that such a lengthy report would be riddled with caveats that could only be properly understood when seen as part of a whole.
Caveats are terms which describe reservations made by experts. Example: a forensic accountant might tell you that ‘my report is based only on the documents which I was shown’ which, in essence, would mean that ‘I cannot say if there are any other documents which were hidden from me’, or an investigator might say, ‘I was only asked to seek information which I could lift from within the room, but I was not given authority to open drawers and filing cabinets to see what was in them’.
Leaving those out will give the opposite picture to what is intended by the author.
Author asking for investigation
The author of the investigation is Joseph Muscat who, through his lawyers, asked the Commissioner of Police to investigate the allegations which the journalist, Daphne Caruana Galizia, made in an article in her news blog on 21 April 2017 in the evening.
Subjects of the investigation
The subjects of the investigation are Joseph Muscat and his spouse Michelle Muscat, in her alleged ownership of Egrant Inc, a secret company set up in Panama by Karl Cini of Nexia BT, with nominee shareholders and nominee directors. Panama is a highly secret jurisdiction and the company’s main object was the receipt of management fees and commissions.
Terms of reference
The formal terms of reference have not been published, however it is clear that they were established by the Prime Minister himself.
The magistrate had stated publicly that his inquiry was specifically restricted to the alleged ownership of Egrant Inc by Michelle Muscat. This is what may be referred to as a straight jacket inquiry.
Countries approached by magistrate to source information
The Republic of Panama – no official information was received from this jurisdiction. Such information could have determined the identity of the ultimate beneficial owner of Egrant.
The United Arab Emirates – no information was received from this jurisdiction up to the date of the writing of the inquiry report. Official Information from Dubai could have been the main source for identifying any alleged receipts into, and payments out of, bank accounts in Dubai held separately in the name of Egrant and in the name of Leyla Aliyeva, the daughter of the President of Azerbaijan.
Witnesses appearing in front of Magistrate Aaron Bugeja
477 persons were involved directly or indirectly in the subject allegations. In the conclusions to the report, only around 22 witnesses are in some way mentioned.
The testimony referred to in the report conclusions was mainly that of Daphne Caruana Galizia, Maria Efimova, Brian Tonna, Karl Cini, Ali Sadr, Hamidreza Ghanbari, Claude-Anne Sant Fournier, Antonella Gauci, Jacqueline Alexander, Verna de Nelson, Luis Quiel, Jurgen Mossack and Michelle Buttigieg.
No mention is made of at least 90% of those giving testimony, and no extracts were given of testimony given by Joseph Muscat, Michelle Muscat, Konrad Mizzi, Keith Schembri, the Attorney General, the Commissioner of Police, Deputy Commissioners Silvio Valletta and Ian Abdilla, who both served as directors of the Financial Investigations Analysis Unit. Ian Abdilla was the Chief Investigator co-ordinating the inquiry investigations and spent around 10 weeks operating with his team within the Chambers of the Magistrate.
Credentials of key witnesses giving testimony through rogatory letters from Panama
Jacqueline Alexander the person who testified that the signature on the declaration of trust was not hers – she was denied bail by the Panama Court and detained as part of organised crime and a money laundering investigation. She is a nominee director of over two thousand secret companies in Panama.
Verna Peron – She is held on bail in Panama for her alleged part in a pyramid scheme where an amount of around Euro 22 million raised in Kenya, vanished through shell companies in Panama. Jacqueline Alexander was also a director with Verna Peron on the involved companies.
Luis Quiel – He is one of the attorneys of Mossack Fonseca who, in the ICIJ Panama Papers, is designated intermediary for many companies that were formed by Mossack Fonseca. The attorneys of Mossack Fonseca are all tainted for their role in hiding their dirty clients, and their money, behind opaque bearer share companies, and counterfeit foundations. Luis Quiel is the person with whom Karl Cini had a skype call to give him verbally the details of the very important person who will own Egrant.
Jurgen Mossack – He is founder partner with Ramon Fonseca of the legal firm Mossack Fonseca which is represented in Malta by Brian Tonna. Jurgen Mossack is under arrest in Panama following a probe into the law firm’s role in creating companies linked to corruption in Brazil involving the National Oil Company, Petrobas.
Panama’s Attorney General said she had information that identified Mossack Fonseca “allegedly as a criminal organisation that is dedicated to hiding money assets from suspicious origins”. She said the firm’s Brazilian representative (Mossack Fonseca Brazil, the equivalent of Brian Tonna’s Mossack Fonseca Malta) had allegedly been instructed to conceal documents and to remove evidence of illegal activities related to a particular case.
Other key witnesses
Ali Sadr Hasheminejad – Owner and Chairman of Pilatus Bank who was arrested by the United federal authorities in March, and charged on several counts of breaching sanctions on Iran as well as with bank fraud and money laundering. Pilatus Bank Malta is the subject of a report by the Financial Intelligence Analysis Unit which found breaches of the Money Laundering Act and Regulations.
Ali Sadr was also caught on camera leaving the bank through the bank’s back door late into the evening of 20 April, with a suitcase in his hands and accompanied by the bank’s risk manager who was also one of the main witnesses in the inquiry. This incident happened hours after Daphne Caruana Galizia had uploaded her article.
Michelle Buttigieg – A former business partner of the Prime Minister’s spouse, Michelle Muscat, in a costume jewellery company Buttardi. She was also appointed by the Prime Minister, through the National Tourism Organisation as its New York Tourism representative with an annual remuneration package of Euro 61,000. Her testimony was regarding an alleged payment of US$ 400,000 described as a loan from Egrant to Buttardi.
Michelle Muscat was reported as having said that Michelle Buttigieg denied in her testimony in court that any money was transferred to her account. This shows that Michelle Muscat and Michelle Buttigieg may have colluded between themselves on the evidence to be given in court.
Brian Tonna – Owner of Willerby Trade Inc registered in the British Virgin Islands. The report of the FIAU on allegations of corruption by Keith Schembri and Brian Tonna in the sale of passports states under the heading of ‘Brief overview of the facts of the case’.
Reference is made to Annex III of the preliminary report dated 7 April, 2016 presented to the former Commissioner of Police, which provides a brief overview of the transactions relating to the company Willerby and its beneficial owner Brian Tonna that were considered by the FIAU to be sufficiently suspicious to warrant notification to the Police.
The conclusion of the FIAU report states that: ‘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 of crime subsists’.
Karl Cini – In the leaked report by the FIAU regarding Konrad Mizzi, it shows that Karl Cini failed to cooperate with the FIAU investigation and, instead, tried to conceal the true owners of the companies in Panama.
As Nexia’s Money Laundering Reporting Officer (MLRO), Karl Cini had a legal obligation to report truthful information to the FIAU, but rather than submitting all email exchanges, he merely told the anti-money-laundering agency that “all instructions and discussions with the clients were verbal”.
The Prevention of Money Laundering legislation states that MLRO’s are legally bound to cooperate with the FIAU and disclose all information when there are suspicions of money laundering or the transfer of illicit funds and, whoever makes ‘a false declaration or a false representation or who produces false documentation’ shall be guilty of an offence and shall be liable, on conviction, to a fine of over Euro 50,000 and imprisonment.
The Inquiry Report conclusions on page 1424 state clearly “Ix-xogħol relatat mat-twaqqif ta’ Egrant Inc kien ħa ħsieb iwettqu Karl Cini” (The work related to the setting up of Egrant Inc was carried out by Karl Cini).
Main observations and comments
The Forensic Accountants are basing their conclusions entirely on data lifted from Pilatus Bank, Karl Cini, Brian Tonna, Nexia BT, MFSP Financial Management Limited and its Executive Director Matthew Pace (Investment manager of Keith Schembri, Malcolm Scerri and their BVI companies Selson and Colson).
Can one rely on lifting the correct data or any data at all, from the above sources, knowing that none of them can claim independence from Joseph Muscat and Egrant?
Can one lift information about Egrant, when Brian Tonna himself declared that he is the absolute owner of Egrant? Lifting information about transactions attributable directly or indirectly to Egrant would incriminate Brian Tonna of money laundering. The only way out would therefore have been that of deleting available digital data and destroying hard data.
The forensic accountants, in their conclusions state: ‘we have not seen any documents revealing that the UBO of Egrant was anyone other than Brian Tonna. This statement is easily contradicted. There was hardly any formal information on Egrant, as communications were made verbally via Skype by Karl Cini, to protect the identity of a highly ranking politically exposed person. This person could not have been Brian Tonna, as he does not fall within the definition of politically exposed person. Furthermore, in his email to Louis Quiel (attorney for Mossack Fonseca), Karl Cini states specifically that ‘the UBO (ultimate beneficial owner) will not be Nexia BT.
Also, ‘why did Joseph Muscat wait for one year, “suffering quietly with his family”, to deny that Egrant was owned directly or indirectly (note: the exact words used in the inquiry conclusions) by his wife Michelle Muscat? Why did he make this declaration during a Xarabank debate with Simon Busuttil on 21 April 2017, a day after he presented the request for a magisterial inquiry? Why did he accuse, during the same debate, Daphne Caruana Galizia of having reproduced falsified information in respect of the Declarations of Trust, rather than denying that there were any Declarations of Trust?
If Brian Tonna was truly the ultimate beneficial owner, there was no scope in having a Declaration of Trust drawn up by himself/or his nominees, to declare to himself that he was the ultimate beneficial owner.
The forensic accountants state that they did find payments of around US$ 100,000 made by Ali Sadr to companies owned by his relatives or to the relatives themselves. This could easily mean that payments to Egrant were circumvented by using members of his family who would obviously comply.
It is common due diligence practice for banks to open bank accounts only if they meet their potential client face to face. This would be a ‘must’ if the potential client is a high ranking politically exposed person, and even more if it is the Prime Minister and his spouse.
In this respect, I ask: “what was the real intention of the Prime Minister in choosing Dubai for an expensive holiday and around the same time when arrangements were being made for the opening of bank accounts of the three Panama companies following the failure of opening bank accounts in Panama? Also, Karl Cini had informed the Dubai Bank that Konrad Mizzi will take the original documents himself which could mean that this was one other reason for Joseph Muscat’s holiday in Dubai.
There are many more questions to ask and comments to make regarding the conclusions of the magisterial inquiry, most of which I have covered in my detailed articles, however I would like to conclude with a few additional specific questions:
Why did the FIAU never carry out an investigation of EGRANT Inc? – surely not because it was owned by Brian Tonna, once his British Virgin Islands company, Willerby, was part of another FIAU report.
Why did Ali Sadr fly in on 20 April 2017, a day before Joseph Muscat asked for a magisterial inquiry? Did Joseph Muscat want to make sure that all incriminating information and documents regarding Egrant, had been safely diverted out of the way or destroyed/deleted, before he made his statement on Xarabank?
Why did Jacqueline Alexander refuse to divulge the information on the Declarations of Trust, by saying that once the signature was forged, it was not in her interest to know what was written? While identifying the signature on the Declaration of Trust, it would be have been impossible not to also sight the remaining details on it.
Why did Karl Cini request immediate confirmations and declarations from Mossack Fonseca after the date of dissolution of Egrant Inc on 6 April 2017 that is, two weeks before the setting up of the magisterial inquiry?
Why did Karl Cini ask for the declaration to be signed by Jacqueline Alexander, the same person who declared her signature on the Declarations of Trust to be forged?
Why did Karl Cini ask the Legal Services at Mossack Fonseca in Panama, for a declaration signed by the subscribers (nominee shareholders) of Egrant, Dubro and Aliator, confirming that, following the assignment of subscription on 8 July 2013, Jacqueline Alexander has not signed any declaration of trust in favour of Michelle Muscat in respect of Egrant Inc, if he was convinced that the ultimate beneficial owner was his partner Brian Tonna and if he believed that the declarations of ownership signed and published by Brian Tonna, were not fake, that is forged?
This would not have been the first time, as in the FIAU report on Konrad Mizzi, the report states: ‘The engagement letter (a contract for services) issued by BTI Management (Brian Tonna) indicates that this document may have been fabricated to coincide and substantiate requests and claims made following the revelations of the Panama Papers.
Also, ‘following an error made on the 1st share certificate dated 22 July 2015, a subsequent share certificate and board meeting declaration were drawn up and both backdated to 21 July 2015. The ease with which documentation was amended and backdated is considered to be suspicious’.
Why did the ‘new’ lawyer of Mossack Fonseca in Panama, Mirzella Tunon, state: ‘please be advised that unfortunately the Subscribers are not allowed to directly certify that no declarations of trust have been signed in favour of Michelle Muscat’?
Did the inquiring magistrate ask Mirzella Tunon, to testify on this document, and if he did, why is her testimony not mentioned in the report conclusions? I am sure that this would have been a determining factor in endorsing known facts, if these really constituted facts, rather than leaving it as another point of circumstantial evidence.
What do the inquiring magistrate and the deputy commissioner of police, Ian Abdilla, leading the inquiry, have to say regarding the statement made by Matthew Caruana Galizia and published on 18 August 2018 that, as a result of Aaron Bugeja’s warning, of consequences if evidence in his possession was handed over to the inquiry, “half the evidence did not become part of the inquiry until it was forced into the hands of the Maltese police by the German Federal Police, who had bought a copy”?
“The magistrate was working completely blind for almost a year, until then”. The other half of the evidence consists of emails sent by Nexia BT and Mossack Fonseca after the publication of the Panama Papers. “These emails contain documents regarding Egrant that were forged by Karl Cini and Luis Quiel, a Mossack Fonseca lawyer who was later fired. Neither Magistrate Bugeja nor the totally incompetent Inspector Ian Abdilla ever made an international request for this data”.
One must also state that Joseph Muscat had said during the Xarabank debate, that, had there been information on Egrant, it would have been published in the Panama Papers. This is in contrast to the above statement by Matthew Caruana Galizia that the email correspondence was exchanged after the publication of the Panama Papers.
Why didn’t Joseph Muscat give us the privilege of his testimony and that of Michelle Muscat? Michelle said that she found the experience of testifying in court “alone, without any assistance” traumatic, and said that despite the inquiry conclusions having cleared her, “the pain will not just go away”.
I ask: What assistance did Michelle Muscat expect to have? A lie detector guiding her? Someone prompting her not to go over the red line? I advise Michelle Muscat to wait till she is on the witness stand on her own, with a strong team of ‘defence lawyers’ pelting her with a barrage of questions, which require answers that cannot be prompted to her beforehand.
The First mammoth cover-up story in Malta’s political history, which may be titled ‘THE PHANTOM OF THE PANAMA OPERA’, is still unfolding, and the phantoms playing the part of Lord and Lady Egrant have still to have their masks uncovered. Time will tell and Werner Langen’s advice to Joseph Muscat that ‘he can run, but he can never hide’ will keep ringing loud.
A link to part 1 of this series is here.
A link to part 2 of this series is here.
A link to part 3 of this series is here.
A link to part 4 of this series is here.
A link to part 5 of this series is here.
A link to part 6 of this series is here.
A link to part 7 of this series is here.