Marsaxlokk parish priest Luke Seguna has been granted bail.

The priest is facing charges of fraud and money-laundering, and is pleading not guilty.

The compilation of evidence against Seguna continued today and witnesses testified in the case against the 39-year-old priest, who was placed on administrative leave by the Curia pending the criminal investigations.

Seguna allegedly had hundreds of thousands of euros deposited in various bank accounts and a collection of five motorbikes and two cars, despite a relatively meagre income as a clergyman. The bank deposits amounted to €450,000 over seven years, when his salary amounted to only €75,000 over the same period. He is denying charges of misappropriating some €500,000 given to him by 150 parishioners over a 10-year span.

A request for bail was made at the end of today's sitting by the defence after a number of witnesses were heard. The prosecution objected, however the bail request was granted by the court against a €20,000 deposit and a €30,000 personal guarantee.

A number of conditions were imposed. Seguna must live at his parents' home, cannot go to Marsaxlokk other than to collect belongings under escort, he cannot travel abroad without permission, cannot approach witnesses or speak to any Marsaxlokk donors, he must sign a bail book twice a week and must observe a curfew.

At the start of the sitting, when speaking about the impact of the case on his client, the priest's lawyer said that his client told him that his (Seguna's) life has ended. The lawyer said this as discussions on whether witnesses were to be heard behind closed doors or not took place.

The request to hear witnesses 'behind closed doors', meaning not in public and away from reporters, was made by the defence

Attorney General lawyer Andrea Zammit protested this, saying that the request was not based on legal principles. The lawyer went on to suggest that witnesses could testify through video conference.

But the court rejected the requests. "There is not going to be a ban, it is not going to be heard behind closed doors and there will be no videoconferencing." decreed the magistrate.

Lawyer Stefano Filletti submitted an application for the Curia to be given parte civile status in the case. He explained that the archdiocese is an umbrella institution for all church-related entities.

The court upheld the request, admitting the archdiocese as a party.

Archdiocese executive secretary Michael Pace Ross, representing the archdiocese of Malta, took the stand and recognised the accused as the Marsaxlokk parish priest.

He said that Seguna had been on the archdiocese's payroll since 2009 and exhibited the relevant FS3s for these years which show the accused's gross and net income.

Pace Ross explained how in 2001 the diocese had introduced regulations on so-called administrative delegates.

Church entities can administrate bank accounts which can only be opened with permission, he said. He said that any funds received by a church entity are to be deposited in bank, but any amount over €10,000 must be deposited through the finance section.

According to Ross, all the accounts including those related to collections must be in the parish's name and that any accounts under the name of a priest must be transferred to the parish's name.

Reading from the regulations, the witness said: "It is an abusive practice that parish funds, such as collection money, is deposited in a personal account, even if then transferred to the parish account." He also said that investments in financial institutions are subject to approval.

The AG asked whether seminarians or candidates to the priesthood received any type of training in financial administration.

"We give annual talks to them and emphasise the importance of financial controls. Whenever the regulations are updated, they are communicated to the parish priests," Pace Ross said.

"What type of scrutiny is made on the finances?" the AG asked.

Quoting from the regulations, he said VAT receipts for every fundraising activity and money should be deposited asap. "Due to money laundering safeguards, there are brackets with increased scrutiny."

The court heard that in 2015, he had started and found a scheme to assist priests with personal loans for various items such as a car, house purchases or overseas travel. Seguna was given such a facility in 2016 to buy a vehicle. This was fully repaid in 2018. In 2021, another loan facility for purchasing a garage was granted and is still outstanding.

Xuereb suggested to the witness that the most costly project, the painting of the Madonna of Pompeii, had been started by his predecessor and Fr. Luke had rectified the financial situation.

The policies are stored on a website with restricted access.

Xuereb said he would be summoning all of the parish priests of Malta to testify in this case.

The witness said the Church in Malta also engaged external auditors which carry out financial checks on every parish on a yearly basis.

Xuereb suggested that Fr. Seguna had never been flagged in any of these audits. "Is this correct?"

"No. Something always emerges from all audits and suggestions for improvement are made," the witness said. "We monitor the parish accounts. There were instances where emails were sent to Fr Luke, or his secretary with questions about payments and lack of receipts."

Xuereb suggested that nothing serious was found otherwise the police would have been involved.

The witness replied that bilateral meetings would be held.

"If someone gives the priest €20 and says 'this is for you', it is his private property, but if it is a donation for the statue of the titular saint, for example, it must be declared," he said.

Fondo Clero is a fund aimed at parishes contributing to paying part of the clergy's salary. The large part of the money comes from the Curia. The contribution is based on the income of previous years. The collection from mass, fees for weddings etc.

The witness said the aim is to have the better off parishes share their income with less well off parishes. Richer parishes pay more into this fund, according to an established formula. "It could be 35%, could be more or less."

The lawyer suggested that Seguna had never received any training on such matters, but the witness said that he would have to check records.

"We are talking about a parish priest and persons of certain importance in the parish. If I receive money for the parish and deposit it in my personal account, this is not good."

The prosecution summoned bank representatives to exhibit cheque images. A representative from APS said that Fr Seguna has two accounts in his name, and exhibited a list of cheques deposited. From HSBC, a representative exhibited a box of documents.

Xuereb interjects arguing that these were clearly more than the evidence disclosed to the accused by right, saying that he "would have to file a constitutional case about this now."

Another representative from BOV exhibited more cheque images.

The defence asked for the expunging of evidence and warned that it would be filing a constitutional case because none of the evidence collected by the investigators had been provided to it, and so it was precluded from any means of controlling the witness.

The court drew the defence's attention to the fact that the defence had the right to reserve cross-examination and it would be seeing that it did so. It would decree on the disclosure issue later.

The next witness was Marsaxlokk resident Darren Desira, owner of a construction company. He said he has known the accused for years as the parish priest of his town.

A lawyer from the Attorney General's office asked whether his company had made any donations to the parish. "I don't have a contractual relationship with him. I see that he does a lot of work in Marsaxlokk and I would help him. I gave him a donation."

He added that he made at least two donations. "I donated to help Fr. Luke continue his valuable work in Marsaxlokk." He hadn't asked for receipts.

The money would be used for maintenance and helping the community, he said. "I heard many people say that Fr. Luke would help families in need during the Covid pandemic."

The witness had only seen the maintenance works himself, he clarified.

"All this was for the good of the parish."

Cross-examined and asked whether the donation was intended to be used by the priest or for the wider church. "I left it to his discretion."

Desira said "They would need some equipment, like scaffolding. I would give money or goods to Fr. Luke and he would distribute as he sees fit."

Desira's brother Mario testified next.

Recognising the accused in the dock, he said he knew him as the Marsaxlokk parish priest and eventually befriended him. He recognised cheques that he had physically handed to the accused. "I gave them to him to administrate them and use them as he saw fit."

"Fr. Luke does a lot of anonymous charity and I gave him the money to carry out acts of charity," going on to say that it was also meant for personal use. Asked whether he received a receipt: "I told him to do what he does with it. I wanted to remain anonymous, how can I expect a receipt if I wanted to remain anonymous".

The Magistrate asked what he meant by personal use. "I believe that the intention I had when giving him the money was the same intention he had."

Marsaxlokk local councillor Daniel Zerafa also testified. He said he issued a €600 personal check to Seguna as personal aid and for the work he does in the community. He also did not ask for a receipt. He praised the priest's work for the community. He said the priest helped open his eyes to poverty and social cases in the locality.