Chile’s former dictator Augusto Pinochet used a web of more than 100 US bank accounts, including 63 with Citigroup, to hide and launder at least US$15 million (S$24 million), a Senate report due out yesterday shows.
Pinochet: used a web of more than 100 US accounts to hide his millions
The Senate Permanent Subcommittee on Investigations found Pinochet’s use of the US financial system to cloak his financial dealings extended far beyond his accounts at Riggs Bank, which has admitted to failing to report suspicious transactions, for which it has paid a US$16 million criminal fine.
The Chilean strongman’s activities also involved accounts at Banco de Chile and Espirito Santo Bank, the Senate subcommittee said.
Related accounts and transactions were found in at least five other banks, including Bank of America, it said.
Most of the Pinochet accounts at Citigroup, the world’s largest financial services company, were handled by Citibank Private Bank, the report said.
‘New information shows that the web of Pinochet accounts in the US was far more extensive, went on far longer, and involved more banks than was previously disclosed,’ said Michigan Senator Carl Levin, the panel’s top Democrat.
‘Some banks actively helped him hide his funds, others failed to comply with US regulations requiring banks to know their customers,’ he said.
The report shows that Pinochet had the longest and closest link with Riggs.
Instead of the nine accounts first reported, it involved 28 and spanned 25 years, not eight.
Riggs also opened accounts for Chilean military officers that were used to funnel US$1.7 million to Pinochet-linked accounts, the Senate subcommittee said.
The first related accounts at Citigroup were opened in 1981 and the company has identified 63 US accounts and certificates of deposit opened for Pinochet and his family in New York and Miami between then and 2004, the Senate subcommittee said.
Of those, 15 were opened for Pinochet personally over 14 years, with another 19 in the name of family members.
Citigroup also helped family members arrange international wire transfers and establish offshore entities. The bank issued credit cards and made loans to several family members, the Senate investigation found.
While Mr Levin called Riggs’ efforts to help Pinochet in a class of their own, he said Citigroup failed to conduct enough due diligence to determine the true identity of its customers and the sources of funds.
‘We don’t want to compare Citibank with Riggs,’ Mr Levin said. ‘On the other hand, there was sloppiness and failure to know your customer … and we can’t let them off the hook,’ he added.
More than 3,000 people died in political violence in the Pinochet era and tens of thousands more were tortured, imprisoned and exiled as the military suppressed opposition.
Pinochet, now 89, kept his money hidden until last July when the Senate panel revealed he had stashed some US$8 million at Riggs.
In January, Riggs agreed to a fine for violation of the US Bank Secrecy Act. This related both to the Pinochet accounts and those of officials of oil-rich Equatorial Guinea. Last month Riggs agreed to settle a Spanish lawsuit by paying US$8 million into a fund for victims of the dictator.