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9-year investigation of mystery Pinochet funds ends; family cleared

August 5, 2013

SANTIAGO, Chile – Chilean judicial officials have brought to a close a nine-year investigation into funds hidden in foreign banks and belonging to former dictator Augusto Pinochet (1973-1990). The result of the lengthy investigation is that no charges will be brought against members of Pinochet’s family.

However, six former military officials stand accused of embezzlement.

Justice Manuel Valderrama decided to close the case known as “Caso Riggs” after investigators were unable to determine the source of $21 million deposited in Riggs Bank in the United States and other financial institutions. The funds were deposited under the names of Pinochet and members of his family.

“The summary phase of the investigation is closed because all efforts have been exhausted,” Valderrama told local journalists.

No charges were brought against Pinochet’s wife, Lucía Hiriart, and their five children. Family members were initially accused of embezzlement.

“The investigation lasted nine long years. Information was requested from and provided by many institutions, and in the end, the investigation went nowhere,” Pinochet’s grandson, Rodrigo García Pinochet, told AFP.

“My grandfather was accused of stealing millions of dollars. He was accused of arms trafficking and gold trading, and in the end, the investigation found nothing. But the smearing of his name and our family’s name will be difficult to reverse,” García Pinochet added.

The judge formally accused six former members of the army with embezzlement of public funds and of helping to hide the money.

Among the accused are former generals Jorge Ballerino and Ramón Castro, who allegedly opened the first secret account for Pinochet in Riggs Bank in Washington, D.C., under the pseudonym Daniel López.

Also arrested are ex-General Sergio Romero and former colonels Eugenio Castillo, Gabriel Vergara and Juan MacLean, who as private secretaries of the former dictator helped transfer funds, open and close accounts and hide the accounts’ existence.

“There was a lack of interest in pursuing this case, and many questions remain unanswered,” prosecuting attorney Alfonso Insunza told local Radio Cooperativa.

“We’ll never know the true extent of Pinochet’s illicit enrichment,” prosecuting attorney Carmen Hertz added.

“Pinochet collected illicit wealth over the 17-year period of his dictatorship, and later conducted an elaborate financial operation to hide the funds,” Hertz said.

The “Riggs Case” began in April 2004, two years before Pinochet’s death in December 2006, after an investigation by the United States Senate revealed the existence of the funds.

The Senate probe began as an investigation of possible terrorism financing following the attacks of Sept. 11, 2001, in the U.S.

Chile’s judicial investigation discovered that nearly 100 bank accounts were opened by the ex-dictator’s administration, but investigators were unable to determine the origin of $17 million of the total $21 million deposited.

One angle of the investigation that was never proved was that the funds could have originated from commissions on arms sales and the diversion of public funds.

Pinochet’s family said the money is a product of the former dictator’s frugal ability to save.

“We’re talking about the patrimony of a man’s entire life. He [Pinochet] had financial investment advisers,” his grandson said on Monday.

“Pinochet committed fiscal fraud,” countered Hertz. “He misappropriated public funds and … that was made clear by the investigation.”

Lawyers have 15 days to appeal the judge’s ruling.

Pinochet was stripped of his former status as president because of the case, and even spent several weeks under house arrest before he died at the age of 91 from a heart attack.

Pinochet’s death also occurred before any convictions were brought against him on charges of human rights violations committed under his brutal dictatorship.

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