Pinochet Wins Partial Court Victory, But Tax Evasion Charges Stand

by Leroy Baker, Tax-News.com, New York

12 April 2006

Former Chilean military dictator Augusto Pinochet has won a partial victory in court after two charges relating to secret offshore bank accounts were dismissed, although the court ruled that charges of tax evasion should stand.

The Santiago Appeals Court on Friday upheld the indictment of Pinochet on charges of evading up to $3 million in taxes related to secret accounts in foreign banks. Judges ruled that charges of falsifying passports should also stand.

The tax evasion charges stem from the discovery by US investigators in 2004 that Pinochet had stashed up to $27 million in secret offshore accounts.

The former army general, who seized power in a coup d'etat in 1973 and ruled Chile until 1990, 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 is also 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. However, the prosecution failed to press home charges of falsifying Defence Ministry documents and false declaration of assets.

Nonetheless, Pinochet's defense team have welcomed the court's decision, and are confident that the remaining charges will also be dropped. They argue that the former leader had earned the money legitimately, and had chosen not to report the foreign accounts to avoid political persecution.

"All he did was hide his money, and now he has even paid all his taxes," lawyer Pablo Rodriguez remarked, according to a report by the BBC.

His accusers contend that the most likely source of Pinochet's income was commissions earned from arms manufacturers for buying and selling weapons.

However, this time the defense team failed to convince the court that the 90-year-old is too ill to stand trial given that he suffers from mild dementia, diabetes, arthritis and has a heat condition. Pinochet has also suffered a series of minor strokes since 1998 and his ailing health has until now helped him to avoid court proceedings on multiple charges of human rights abuses.

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