The Malta Independent 5 May 2025, Monday
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Printing press, Vitals, phantom job, murder leaks and 17 Black: Keith Schembri's cases

Albert Galea Sunday, 16 March 2025, 09:00 Last update: about 3 months ago

It's been four years since Keith Schembri's house of cards came tumbling down with him facing criminal charges for the first time.

Since then, the former chief of staff to Prime Minister Joseph Muscat has been charged in connection with four more cases, with the allegations against him ranging from corruption to fraud to money laundering and to misappropriation.

While Schembri has consistently decried the charges against him as injustices and as a Nationalist-led plot against him based on the simple fact that he was a Labourite who became successful, others on the other side of the political spectrum believed that Schembri landing in court was the obvious inevitable.

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A printing press, a phantom job, a hospitals' deal, a murder investigation and a power station - this is a summary of the court cases that Muscat's former right-hand man now finds himself neck deep in, four years on from his first.

 

#1: The Progress Press printing machine

Schembri himself announced on 18 March 2021 that he was set to face criminal charges in relation to a money laundering probe involving him, Adrian Hillman and the directors of Allied Newspapers over the purchase of a printing press.

The inquiry dealt with allegations that Hillman, a former managing director of Allied Newspapers, received €650,000 worth of bribes from Schembri through a British Virgin Islands company.

A second inquiry also found that Schembri had received two €50,000 payments in kickbacks from the sale of Maltese passports through the IIP scheme. That inquiry was concluded in September 2020, and Schembri was arrested and interrogated by investigators over the inquiry's conclusions.

Schembri was formally charged in court on 20 March 2021 together with 10 other people, including his father, Hillman and former Progress Press chairman Vince Buhagiar.

The court heard how Progress Press - which is fully owned by the Allied Group, which also runs the Times of Malta and the Sunday Times of Malta - ended up paying $6.5m extra for printing machines with the money shared between Schembri, Malcolm Scerri and Allied Group directors Hillman and Buhagiar.

The sale of the machinery in question pre-dated when Schembri become Prime Minister Muscat's chief of staff but investigations focused on transactions which stretched into 2015.

Schembri was remanded in custody and spent almost two weeks in prison before eventually being granted bail.

He had shed doubts on the magisterial inquiry that led to his eventual charge and described his arrest as a "plot from the PN establishment" - a clear implication that, somehow, the Nationalist Party had taken over the country's institutions. 

He also reminded supporters, prior to his prosecution, of the vital role he played in the party's string of electoral victories in a clear aim to fire up Labour supporters.

Muscat's successor, Robert Abela, bit back at Schembri's doubts on the magisterial inquiry, saying that he has complete trust in the institutions - including the inquiring magistrate in that case - and will let nobody, no matter who they are, undermine their integrity.

Schembri and all the other accused are currently awaiting trial in connection with the case.

 

#2: Melvin Theuma's phantom job

In June 2022 it emerged that Schembri was among five set to be charged over a phantom job which was given to Melvin Theuma - the pardoned middleman in the Daphne Caruana Galizia murder case.

Yorgen Fenech, who is accused of complicity in the murder of the journalist, former OPM staffer Sandro Craus, former Family Ministry private secretary Anthony Mario Ellul and former government CEO Anthony Muscat also faced charges.

They were all charged with theft and misappropriation of public funds - charges which they deny.

The charges were born from Theuma's testimonies in the Caruana Galizia murder case. He told a court that he had received a phantom job from the government, which is in essence a job where one does not need to report for work, but gets paid regardless.

Theuma had said that Fenech had told him to expect a call from Craus, and the following day he was met by Schembri on the steps of Castille. At Castille, Theuma and Schembri posed for a photo and Theuma was granted a government job. He told the court that he never went to work but still received a monthly salary.

The principal permanent secretary Mario Cutajar later said that Theuma was employed "after a public call" and was on the books between May and August 2017. Theuma had testified that the job was granted to him days after he discussed the hit on Caruana Galizia with Fenech.

There was a snag though: Theuma himself refused to testify in this particular case, after questions arose about whether his presidential pardon truly protected him from self-incrimination if he were to testify.

The defence lawyers subsequently demanded that every reference to Theuma's testimony before the magisterial inquiry into the phantom job be expunged - but this request was rejected, leading the presiding magistrate to formally indict the five accused in October 2022.

In November 2024 however, Magistrate Monica Vella decreed that Theuma's testimony is inadmissible after he continued to refuse to testify and be cross-examined.

The magistrate ruled that Theuma's refusal to undergo cross-examination violated several legal principles, leaving the court with no choice but to grant the defence's request to exclude his testimony. 

The court further ordered the removal of this testimony from the case records, including those from the magisterial inquiry, which had been submitted as evidence - thereby throwing the fate of the case into jeopardy for the prosecution, as it hinged on Theuma's own words.

 

#3: The Vitals hospitals' deal

Perhaps the most high-profile case of them all - Schembri was among a myriad of individuals - including his former boss Joseph Muscat - who were criminally charged in relation to the Vitals hospitals' deal, which Muscat's administration brokered.

Schembri faces numerous charges including corruption, fraud, conspiracy to commit a crime and money laundering in connection with the transfer of three government-owned hospitals to Vitals Global Healthcare.

The deal had already been declared fraudulent by the civil courts and rescinded in 2023, but a magisterial inquiry, which was launched following an application by civil society NGO Repubblika in 2019 concluded last year - in the run-up to the European Parliament elections.

The timing drew stinging criticism from the government, with Prime Minister Abela reacting considerably differently to how he reacted when Schembri faced his first set of charges in connection with the Progress Press inquiry.

This time, the Prime Minister and members of the government as a whole questioned the timing of the inquiry being concluded, claimed that a shadowy so-called "establishment" was orchestrating things in order to undermine the Labour Party, and raised multiple doubts on the inquiry itself.

Schembri, together with Abela's predecessor Muscat and former minister Konrad Mizzi among others, were charged in court on 28 May 2024 and were met in Valletta by a crowd of supporters who chanted their name and protested their innocence.

All of the accused, including Schembri, have pleaded not guilty to the charges and questioned everything from the case itself to the foreign experts, who were engaged in the magisterial inquiry.

On 25 June 2024 however, Magistrate Rachel Montebello deemed there to be enough prima facie evidence for Schembri, Muscat, Mizzi and company, to stand trial for the case.

The case remains ongoing.

 

#4: Leaks from the Daphne Caruana Galizia investigation

In November 2024 it emerged that Schembri was to also face charges connected to an investigation into leaks from the Daphne Caruana Galizia murder investigation.

Schembri was charged with perjury and breaching the Official Secrets Act after the conclusion of a five-year investigation, prompted by a claim by Yorgen Fenech himself, that Schembri had leaked information to him.

A court has since heard of how Schembri was in possession of a confidential police email about two Maltese people who were mistakenly arrested in Sicily - a case which Fenech had asked Schembri about.

Last week it emerged that Schembri had alerted Fenech that Vince Muscat - one of three hitmen engaged to kill Caruana Galizia - had started to cooperate with police; something that prosecutors argued only Schembri could know.

Once, in January 2019, Schembri sent a court decree that had not yet been released. Another time, in February 2019, Schembri sent an internal police email to Fenech, investigators testified, saying that the former OPM chief of staff used the word "confi" on these occasions to signify that the documents were confidential.

Investigations also found that Schembri and Fenech were communicating on a messaging app called Signal, which had a setting that would allow messages to disappear after a certain number of hours. WhatsApp now also has this function, but did not during 2019.

After reviewing Fenech's phone, the police found that Fenech changed the disappearing messaging settings around 13 times. There were also 149 tentative calls between the two on Signal, with investigators testifying how the duo were constantly exchanging messages in 2019 until Fenech was arrested in November that year.

Schembri had also been brought in for questioning when Fenech was arrested, but he had told police that he had lost his phone.

 

#5: 17 Black

This is the most recent case out of the five and was also born out of a magisterial inquiry which was requested by a member of the public - in this case, by the then leader of the Opposition, Simon Busuttil.

The inquiry was requested after media reports revealed that the secret Dubai company 17 Black was listed as a "target client" for Schembri and Mizzi's once-secret Panama companies in a leaked document.

In 2018, it was revealed by Times of Malta and Reuters that 17 Black was owned by Fenech, who was a shareholder in the Electrogas consortium that won a multi-million-euro gas power station tender.

The leaked document showed that Fenech intended to use 17 Black to funnel millions to the Panama companies owned by Schembri and Mizzi - companies outed in the Panama Papers investigation a couple of years prior.

Schembri, Mizzi, Fenech and several others were charged with corruption, trading in influence and criminal association. They all pleaded not guilty.

Last month, Magistrate Rachel Montebello declared that there was enough prima facie evidence for the charged individuals to stand trial.

The case continues next month.

 


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