Magistrate Donatella Frendo Dimech has denied bail to four accused in connection with their work for accounting firm Nexia BT in a case in which they are among 11 accused of financial crimes.

The four – company owner Brian Tonna, partners Karl Cini and Manuel Castagna, and Senior Accounts Manager Katrin Bondin Carter – were sent back to Corradino Correctional Facility after the magistrate concluded the allegations of fraud linked with Tonna and Cini and the falsification of documents following investigations by the FIAU “do not give peace of mind to the Court”.

Frendo Dimech’s decision followed a full day’s hearing on the four accused in which defence lawyers cross-examined police officers involved in the investigation. A number of police inspectors took the stand, testifying about their findings.

The four accused are among 11 facing charges related to a series of major financial crimes, with the exception of the former Managing Director of Allied Newspapers Adrian Hillman who was abroad when the rest were arrested. The police are refusing to comment on whether he has returned.

The other persons charged include former Chief of Staff Keith Schembri, Kasco Group associates Malcolm Scerri and Robert Zammit, Schembri’s father Alfio Schembri and Lorraine Falzon, and Matthew Pace from Zenith (formerly MFSP Financial). The magistrate denied bail to Keith Schembri earlier today.

Backdated and falsified documents

The first witness to take the stand was Police Inspector Ian Camilleri from the anti-money laundering squad. Camilleri told the Magistrate how Bondin Carter had, together with Cini, helped to prepare the backdated documents presented to Pilatus Bank.

Defence lawyer Franco Debono, who is representing Bondin Carter, asked Camilleri about the extent of Bondin Carter’s involvement. He asked whether his client was merely acting on instructions from her superiors.

“Yes,” Camilleri replied, adding that she had told them that she was the Senior Accounts Manager.

Debono then asked similar questions in his cross-examination of Police Inspector Anne Marie Xuereb. Xuereb clarified that Bondin Carter would “write everything”. She explained that the documents they were referring to were the ones that Pilatus Bank had asked for in the due diligence process.

Lawyer Stephen Tonna Lowell, representing Tonna and Cini, asked Inspector Xuereb which documents she was referring to when saying they had been falsified. Xuereb said they included documents presented to Pilatus Bank and others presented to Bank of Valletta. She later added that false documents also include a cheque of €84,000 to MFSP, now Zenith.

The lawyer pointed out that during questioning, Cini and Tonna admitted to backdating the documents and that the content was always correct.

Transactions and more transactions

Police inspectors who testified went through a list of transactions that were made to accounts held by companies linked to the accused.

Inspector John J. Cauchi, from the Financial Crime Department, who was tasked with investigating KBT Holdings, listed large payments, which included BT International, Kasco Ltd. and Zenith (formerly MFSP).

Cauchi told the Court that Tonna was director of the company until February 2020, when his daughter Beverly Tonna took over the directorship of the company. She is also the legal representative, administrator, and shareholder, he said. Various transactions were made into an HSBC account belonging to the company, including a €10,000 to Beverly Tonna and Brian Tonna received over €21,000 in numerous instalments, he said.

Police inspector Ritianne Cutajar, who was tasked with investigating accounts belonging to Nexia BT and BT International, said that BT International received a number of payments from foreign individuals to obtain citizenship. Listing some transactions, Cutajar said that one account featured the name of a known fraudster having received about €7,000. She added that in 2015 and 2016, some €580,000 were deposited into the accounts Willerby Trade.