PM chief of staff: what we are looking at here is likely to be a money-laundering/tax evasion operation

The point that should not be missed when you are reading my earlier posts (uploaded yesterday) about the published financial statements for Kasco Holdings Ltd – the business which is 99.9% controlled by the Prime Minister’s chief of staff, Keith Schembri – is that the business is audited, and the financial statements prepared, by the very same accountant who set up Schembri’s secret company in Panama and restructured his secret company in the British Virgin Islands in 2013.

Kasco Holdings Ltd has moved from a profit situation to registering significant losses over the same period, with cost of sales and administrative costs outstripping revenue from sales, and with loans of €6 million while standing as guarantor to the loans of related companies for €12 million in 2013 and €3 million in 2014. This indicates that Kasco Holdings Ltd is in itself a money-laundering operation and/or that its legitimate profits are being illegitimately diverted to bank accounts linked to Colson Services Ltd in the British Virgin Islands and/or Tillgate Inc in Panama, which are in Keith Schembri’s personal name and not Kasco Holdings Ltd’s.

The fact that the company’s accounts are audited and financial statements prepared by Brian Tonna, the same individual who advised on the restructuring of Colson Services Ltd (BVI) in 2013 and on the setting up of Tillgate Inc in Panama that same year makes the matter even more serious.

I would strongly suggest that what we are looking at here is a pattern of tax evasion and money-laundering, following the exact same system that Brian Tonna set up for himself and also for Malcolm Scerri. It is the classic money-laundering/tax evasion set-up, and it wouldn’t be possible – it would be detected immediately – if the companies’ auditor were truly independent as he is supposed to be. But in these cases, the companies’ auditor is in collusion and is the one who set up or reorganised the secret offshore companies.

All three – Brian Tonna, the Prime Minister’s chief of staff, and his co-shareholder/business manager Malcolm Scerri – have the exact same set-up, composed of a legitimate company/companies in Malta and a secret company/companies in offshore jurisdictions, ownership of which is thoroughly concealed by nominee shareholders and nominee directors. (The fact that those companies have been discovered is, as we know now, a total fluke.)

In short form, what happens is this. The secret offshore shell company, whose ownership is concealed, invoices the legitimate, registered Malta company, which then pays the money out of Malta and into a bank account linked to the offshore company. It looks as though the Malta company is paying a legitimate invoice from a supplier or service provider, when in reality the owner of both companies is using his legitimate Malta company to pay out money to himself personally via his concealed-ownership offshore company. The invoices which the Malta company has paid are then classed with cost of sales or administrative expenses and become tax deductible, lowering the Malta’s company’s profits (or eliminating them altogether) while also lowering or wiping out the Malta’s company’s exposure to income tax.

We know – because he has as good as admitted it – that this is what Brian Tonna is doing even as he sells Maltese passports from his conflict-of-interest position in the Office of the Prime Minister. He set up Willerby Inc in the British Virgin Islands shortly after the Labour Party came to power, precisely to invoice his legitimate Malta company, BTI Management Ltd. (BTI Management Ltd, incidentally, is the company to which the highly suspect HSBC Bank Malta information reports for Malcolm Scerri and Keith Schembri are addressed.)

All three of them have a similar set-up. The Prime Minister’s chief of staff has Colson Services Ltd in the British Virgin Islands and Tillgate Inc in Panama, and various companies in Malta, the most significant of which is Kasco Holdings Ltd. Brian Tonna has Willerby Inc in the British Virgin Islands and BTI Management Ltd in Malta (his personal company, as distinct from the formal firm Nexia BT).

Malcolm Scerri has Selson Holding Corp in the British Virgin Islands. He has a Malta company, Thoughtzone Ltd, through which he holds 50% of the shares in Berner Malta Ltd. The other 50% are held by Kasco Holdings Ltd. In his personal name, he is a 50% shareholder in Tekhne Industrial Ltd. The other 50% are held by Kasco Holdings. And also in his personal name, he holds 50% of the shares in Kasco Engineering Ltd, with the other 50% held by Kasco Holdings. Scerri is also a director of, but not a shareholder in, Kasco Ltd, Kasco Recycling and Kasco Trading.

I believe that a proper investigation of the Malta companies will find that they are being invoiced by Willerby Inc, Colson Services Ltd and Selson Holding Corp in the British Virgin Islands – something that would have been immediately discovered and reports by the auditor had not the auditor been directly involved too.

Of course, this does not preclude that the offshore companies are also used for other, even more illicit, purposes – particularly given the Prime Minister’s chief of staff’s status in the government and the fact that the other two men are his close associates.