Tax Fraud and Foreign Bank Accounts
The U.S. Senate Permanent Subcommittee on Investigations released a report about Riggs Bank on July 15, 2004, which had solicited Pinochet and controlled between USD $4 million and $8 million of his assets. According to the report, Riggs participated in money laundering for Pinochet, setting up offshore shell corporations (referring to Pinochet as only "a former public official"), and hiding his accounts from regulatory agencies. The report said the violations were "symptomatic of uneven and, at times, ineffective enforcement by all federal bank regulators, of bank compliance with their anti-money-laundering obligations." In 2006, Pinochet's total wealth was estimated at $28 million or more.
Five days later, a Chilean court formally opened an investigation into Pinochet's finances for the first time, on allegations of fraud, misappropriation of funds, and bribery. Then, a few hours later, the state prosecutor, Chile's State Defense Council (Consejo de Defensa del Estado), presented a second request for the same judge to investigate Pinochet's assets, but without directly accusing him of crimes. On 1 October 2004, Chile's Internal Revenue Service ("Servicio de Impuestos Internos") filed a lawsuit against Pinochet, accusing him of fraud and tax evasion, for the amount of USD $3.6 million in investment accounts at Riggs between 1996 and 2002. Furthermore, a lawsuit against the Riggs Bank and Joe L. Allbritton, chief executive of the bank until 2001, was closed after the Riggs agreed in February 2005 to pay $9 million to Pinochet's victims in compensation of the money-laundering activity with Pinochet.
Pinochet could have faced in Chile fines totaling 300 percent of the amount owed, and prison time, if convicted before his death. Aside from the legal ramifications, this evidence of financial impropiety severely embarrassed Pinochet. According to the State Defense Council, his hidden assets could never have been acquired solely on the basis of his salary as President, Chief of the Armed Forces, and Life Senator.
Read more about this topic: Augusto Pinochet's Arrest And Trial
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