Image source: MaltaToday
First off, what happened?
Late last night, Ali Sadr Hashemi Nejad, the chairman and owner of Pilatus Bank, was arrested by US authorities. Sadr now faces life in prison over charges of evading sanctions and money laundering.
Ali Sadr allegedly used a network of front companies to hide business dealings in Venezuela, moving $115 million through companies set up in Switzerland, Turkey and the British Virgin Islands.
What is Pilatus Bank?
Pilatus Bank is the bank at the centre of a multitude of allegations, most prominently by the late Daphne Caruana Galizia.
Ms Caruana Galizia, some months before her murder, revealed that Pilatus Bank (which holds less than 100 bank accounts in total) had amongst its clients prominent members of the Azerbaijan regime and a number of Maltese politicians. For her efforts Ali Sadr sued her for defamation in the US.
Why does this matter?
Crucially, Caruana Galizia said that Pilatus Bank had been set up to facilitate money laundering and had been used to transfer money from the account of Leyla Aliyeva (daughter of Azeri dictator Ilham Aliyev) to Michelle Muscat, Konrad Mizzi and Keith Schembri. Other allegations claim the bank was used by Keith Schembri and Brian Tonna to receive kickbacks from the sale of Maltese passports.
Shortly after the former story was published, Mr Ali Sadr and an associate were seen leaving Pilatus Bank at night but were not apprehended by the Maltese police. Ali Sadr left Malta on a flight soon afterward. Police Chief Lawrence Cutajar was at the time dining at a restaurant, and insisted that the Police had no reason to get involved.
Ali Sadr’s sister, Negarin Sadr Hasheminejad, also allegedly gave a €400,000 loan to Michelle Muscat’s business partner, Michelle Buttigieg. The latter is being paid €60,000 a year as a ‘tourism representative’ for Malta.
Ali Sadr, owner and chairman of Pilatus, also had a close relationship with Joe Bannister, former executive chairman of the MFSA. The MFSA, which issued Sadr a license to open a bank, is now tasked with deciding whether to revoke the bank’s license or leave it unscathed.
Pilatus Bank markets itself as the most innovative bank in Europe.
What has the government’s response been?
Mr Sadr and his bank have been repeatedly and emphatically defended by the Maltese government. His arrest in the US on charges of money laundering, if the charges are proved to be accurate, raise questions about why the government, the MFSA, the FIAU and the Police Force have defended a criminal and fraudster.
What about their response to the arrest?
Finance Minister Edward Scicluna, asked questions this morning by a journalist, gave little away. Asked about his reaction to the arrest, he said: “Uwejja you’re going to ask me these questions in the morning?” Pressed repeatedly, he continued: “These are serious things which involves the regulators,” he said. “When I go back to the office, we’ll start the work and see what to do.”
The MFSA, which issued Mr Sadr a license to open a bank in Malta, and the FIAU, which is tasked with combating money laundering and financial crime, have so far not commented. Mr Lawrence Cutajar, Chief of the Malta Police Force, has not commented either.