Post by Moses on Feb 26, 2005 1:59:02 GMT -5
Riggs Bank to Pay $8 Million to Pinochet Victims
By Jonathan Stempel and Fiona Ortiz
NEW YORK/SANTIAGO (Reuters) - A U.S. bank that ran into serious trouble for helping foreign officials hide money has agreed to settle a Spanish lawsuit by paying $8 million into a fund for victims of former client Chilean ex-dictator Augusto Pinochet , the bank said on Friday.
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In Chile, a human rights lawyer called the settlement in Spain by Washington, D.C.-based Riggs National Corp. an important part of international efforts to bring Pinochet to justice for human rights abuses during his 1973-1990 rule.
The ailing, 89-year-old retired general has been named in many human rights cases in Chile and is also being probed for tax evasion, tax fraud and embezzlement of state funds. But he has never been convicted of any crime.
"This demonstrates that the horrors of the Pinochet dictatorship are not a mystery to anyone and that the whole world knows his victims deserve reparations," Eduardo Contreras, a lawyer who represents victims' families in Chilean human rights cases, told Reuters.
The settlement is also a victory for Spanish Judge Baltasar Garzon, who has been on a decade-long transatlantic crusade to prosecute Pinochet for crimes against humanity.
Garzon filed a legal complaint against Riggs last year in Madrid, alleging the bank had illegally concealed assets, and ordered the creation of a fund for victims of Pinochet.
"This enables the institution to put the matter behind us," said Riggs spokesman Mark Hendrix.
Hendrix said Riggs would pay the $8 million using funds set aside for litigation, and that the Madrid court had dismissed criminal and civil claims against the company and seven former and current directors.
In 1998, Garzon failed to uncover any hidden Pinochet funds at Riggs or elsewhere when he put out an international order to freeze assets of the former dictator.
RIGGS MONEY SPARKS SUITS, INVESTIGATIONS
Garzon had better luck with an international arrest warrant for Pinochet accusing him of crimes against humanity that led to the former Chilean leader being detained for more than a year in England in the late 1990s.
But that fell apart when the British sent Pinochet home, saying his health was so weak he should not be extradited to Spain for trial.
More than 3,000 people died in political violence during the Pinochet era and tens of thousands of others were tortured, imprisoned and forced into exile as the military suppressed opposition.
Pinochet had kept his money well hidden until last July when a U.S. Senate subcommittee investigation on possible money laundering activities at Riggs revealed Pinochet had stashed up to $8 million at the bank.
In January, Riggs pleaded guilty and agreed to a $16 million criminal fine for not reporting suspicious transactions under the U.S. Bank Secrecy Act. This related to accounts of Pinochet and officials of oil-rich Equatorial Guinea.
The Riggs accounts shocked even die-hard Pinochet supporters in Chile, where he was seen as clean in money matters despite the violence of his regime.
They also prompted a flurry of investigations in Chile, where courts have now accused Pinochet of tax evasion and tax fraud and judges have frozen millions of dollars of his assets and are deciding whether there is enough evidence to also go after him for embezzling state funds.
Chile's No. 2 bank, Banco de Chile last month said it was being investigated for compliance with U.S. money laundering laws related to suspected Pinochet accounts.
Pinochet's lawyers have said the money in the Riggs accounts came from legitimate sources. Pinochet's defense has also offered to pay millions of dollars in back taxes to the Chilean tax agency in a bid to free up his other assets.
Pinochet, who controlled every aspect of Chilean life after taking power in a military coup, is now largely irrelevant after 15 years of democratic, center-left rule. He lives at home and his lawyers have so far kept him from trial, arguing he is too ill to defend himself.
The Pinochet accounts have meant other woes for Riggs, once the dominant U.S. banker for the diplomatic community, which agreed earlier this month to a reduced $652 million takeover by Pittsburgh-based PNC Financial Services Group Inc., down from an earlier $779 million merger deal.
But in an updated registration statement filed on Friday with the U.S. Securities and Exchange Commission (news - web sites), PNC said payments, accelerated vesting and other benefits to be paid to Riggs officers and directors could add up to $15.4 million.
In Friday trading, Riggs shares rose 10 cents to $19.41 on the Nasdaq, and PNC shares rose 50 cents to $52.86 on the New York Stock Exchange .