Pinochet Family Members Arrested On Charges Of Tax Evasion

by Mike Godfrey, Tax-News.com, Washington

26 January 2006

Former Chilean dictator Augusto Pinochet's wife and four grown children were arrested and indicted earlier this week for tax evasion in connection with millions of dollars which the Chilean authorities believes to be held in secret foreign bank accounts.

Court officials in Santiago told reporters Monday that Judge Carlos Cerda ordered the arrest of Pinochet's wife, Lucia Hiriart, and four of the couple's five children on tax fraud and other charges. All were granted bail.

The case involves about $27 million in foreign bank accounts that have been tied to Pinochet, the former army general who seized power in a coup d'etat in 1973 and ruled Chile until 1990.

Pinochet is said to have evaded taxes by hiding money in various foreign banks accounts, including in the Bahamas, the Cayman Islands, Columbia, Germany, Panama, Spain, the United Kingdom and the United States.

He has also been accused of using false passports to open bank accounts, submitting a fake government document to a foreign bank and filing a false report on the size of his assets.

Pinochet's defence team argued that the former leader had earned the money legitimately, and had chosen not to report the foreign accounts to avoid political persecution.

However, a US Senate investigators' report had found that shell companies had been used by the former Riggs Bank in Washington help Pinochet hide millions in assets from prosecutors while he was under house arrest in Britain on human rights charges.

Pinochet also faces tax-fraud charges in Chile, but his ill health and advancing years (he turned 90 last year) have allowed him to avoid the legal process on numerous occasions.

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