Pinochet - Secret Bank Accounts, Tax Evasion and Arms Deal

Secret Bank Accounts, Tax Evasion and Arms Deal

In 2004, a United States Senate money laundering investigation led by Senators Carl Levin (D-MI) and Norm Coleman (R-MN)—ordered in the wake of the 11 September 2001 attacks—uncovered a network of over 125 securities and bank accounts at Riggs Bank and other U.S. financial institutions used by Pinochet and his associates for twenty-five years to secretly move millions of dollars. Though the subcommittee was charged only with investigating compliance of financial institutions under the USA PATRIOT Act, and not the Pinochet regime, Senator Coleman noted:

This is a sad, sordid tale of money laundering involving Pinochet accounts at multiple financial institutions using alias names, offshore accounts, and close associates. As a former General and President of Chile, Pinochet was a well-known human rights violator and violent dictator.

Over several months in 2005, Chilean judge Sergio Muñoz indicted Augusto Pinochet's wife, Lucia Hiriart; four of his children — Marco Antonio, Jacqueline, Veronica and Lucia Pinochet; his personal secretary, Monica Ananias; and his former aide Oscar Aitken on tax evasion and falsification charges stemming from the Riggs Bank investigation. In January 2006, daughter Lucia Pinochet was detained at Washington DC-Dulles airport and subsequently deported while attempting to evade the tax charges in Chile. In January 2007, the Santiago Court of Appeals revoked most of the indictment from Judge Carlos Cerda against the Pinochet family. But Pinochet's five children, his wife and 17 other persons (including two generals, one of his former lawyer and former secretary) were arrested in October 2007 on charges of embezzlement and use of false passports. They are accused of having illegally transferred $27m (£13.2m) to foreign bank accounts during Pinochet's rule.

In September 2005, a joint investigation by The Guardian and La Tercera revealed that the British arms firm BAE Systems had been identified as paying more than £1m to Pinochet, through a front company in the British Virgin Islands, which BAE has used to channel commission on arms deals. The payments began in 1997 and lasted until 2004.

Furthermore, in 2007, fifteen years of investigation led to the conclusion that the 1992 assassination of DINA Colonel Gerardo Huber was most probably related to various illegal arms traffic carried out, after Pinochet's resignation from power, by military circles very close to himself. Huber had been assassinated a short time before he was due to testify in the case concerning the 1991 illegal export of weapons to Croatian army. The deal involved 370 tons of weapons, sold to Croatia by Chile on 7 December 1991, when the former country was under a United Nations' embargo because of the support for Croatia war in Yugoslavia. In January 1992, the judge Hernán Correa de la Cerda wanted to hear Gerardo Huber in this case, but the latter may have been silenced to avoid implicating Pinochet in this new case—although the latter was not anymore President, he remained at the time Commander-in-Chief of the Army. Pinochet was at the center of this illegal arms trade, receiving money through various offshores and front companies, including the Banco Coutts International in Miami.

Pinochet was stripped of his parliamentary immunity in August 2000 by the Supreme Court, and indicted by judge Juan Guzmán Tapia. Guzmán had ordered in 1999 the arrest of five militarists, including General Pedro Espinoza Bravo of the DINA, for their role in the Caravan of Death following the 11 September coup. Arguing that the bodies of the "disappeared" were still missing, he made jurisprudence, which had as effect to lift any prescription on the crimes committed by the military. Pinochet's trial continued until his death on 10 December 2006, with an alternation of indictments for specific cases, lifting of immunities by the Supreme Court or to the contrary immunity from prosecution, with his health a main argument for, or against, his prosecution.

The Supreme Court affirmed, in March 2005, Pinochet's immunity concerning the 1974 assassination of General Carlos Prats in Buenos Aires, which had taken place in the frame of Operation Condor. However, he was deemed fit to stand trial for Operation Colombo, during which 119 political opponents were "disappeared" in Argentina. The Chilean justice also lifted his immunity on the Villa Grimaldi case, a detention and torture center in the outskirts of Santiago. Pinochet, who still benefited from a reputation of righteousness from his supporters, lost legitimacy when he was put under house arrest on tax fraud and passport forgery, following the publication by the US Senate Permanent Subcommittee on Investigations of a report concerning the Riggs Bank in July 2004. The report was a consequence of investigations on financial funding of the 11 September 2001 attacks in the US. The bank controlled between US$4 million and $8 million of Pinochet's assets, who lived in Santiago in a modest house, dissimulating his wealth. 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. Related to Pinochet's and his family secret bank accounts in United States and in Caribbean islands, this tax fraud filing for an amount of 27 million dollars shocked the conservative sectors who still supported him. Ninety percent of these funds would have been raised between 1990 and 1998, when Pinochet was chief of the Chilean armies, and would essentially have come from weapons traffic (when purchasing Belgian 'Mirage' air-fighters in 1994, Dutch 'Léopard' tanks, Swiss 'Mowag' tanks or by illegal sales of weapons to Croatia, in the middle of the Balkans war.) His wife, Lucía Hiriart, and his son, Marco Antonio Pinochet, were also sued for complicity. For the fourth time in seven years, Pinochet was indicted by the Chilean justice.