You are here

Litigation costs may devastate gold rigger Morgan Chase''s earnings this year

Section: Daily Dispatches

By James Rowley
Bloomberg News Service
Wednesday, March 16, 2005

http://www.bloomberg.com/apps/news?
pid=10000086&sid=aWkzQ4eLXp74&refer=latin_america

Former Chilean dictator Augusto Pinochet and his family over 25
years stashed at least $15 million in more than 125 hidden accounts
at Citigroup Inc. and other banks, a U.S. Senate report said.

Pinochet, 89, whose regime killed and tortured thousands of
Chileans, used the accounts to move funds from offshore holding
companies to personal accounts in the U.S. and to transfer cash to
Chile, said the staff report of the Senate's Permanent Subcommittee
on Investigations.

Senate investigators said the former dictator's use of banks with
U.S. operations was far more extensive than previously disclosed. In
addition to 63 accounts at Citigroup and 28 at Washington-based
Riggs Bank, Pinochet and his family had accounts at foreign banks
with U.S. operations, including Banco de Chile and Espirito Santo
Bank of Miami, a unit of Portugal's Banco Espirito Santo, the report
said.

Before 2004, "U.S. regulators and law enforcement were generally
unaware that Augusto Pinochet had constructed a web of largely
hidden accounts in the U.S. and was using these accounts on a
regular basis to move funds and transact business," the report said.

The Senate report found that Citigroup helped the Pinochet family
set up two offshore holding companies and provided family members
with lines of credit in foreign countries such as Argentina, the
Bahamas, Switzerland, Chile, and the U.K. New York- based Citigroup
has ended those non-U.S. dealings with the Pinochet family, the
subcommittee said.

Citigroup extended loans to the Pinochets and their holding
companies totaling more than $3 million, which were repaid, the
report said. Pinochet used Citigroup accounts to "move funds within
the U.S. and across international lines, transact business, and
construct an international web of secret accounts," the report said.

In a statement, Citigroup said that its accounts for
Pinochet, "which he opened with false documentation using
pseudonyms, were shut down nearly a decade ago." Citibank began
closing remaining accounts in 1998. The bank said it has
developed "industry-leading controls" to combat money laundering.

Pablo Granifo, chief executive of Banco de Chile, didn't return a
message seeking comment. The bank said last month it is cooperating
in a U.S. investigation of money laundering.

Paulo Padrao, a spokesman for Banco Espirito Santo, declined
comment.

Pinochet led Chile following the 1973 military coup that overthrew
President Salvador Allende. Pinochet ruled until 1990 and remained
head of the armed forces until 1998. More than 3,000 people were
killed during Pinochet's regime and about 28,000 were tortured,
according to Chilean government commissions.

Chilean courts broadened probes into Pinochet's rule following his
arrest in London in October 1998 at the request of Spanish Judge
Baltasar Garzon, who sought Pinochet's extradition for trial. The
U.K. allowed Pinochet to return to Chile in March 2000, saying he
was too frail to face trial.

In 2002, Chile's Supreme Court, deciding that Pinochet was mentally
unfit to defend himself, dismissed charges that he covered up the
killings of dozens of people following the coup. The financial
information uncovered by the U.S. Senate may help investigators
bring tax evasion charges against the retired general, said Carmen
Hertz, a human rights lawyer involved in a Chilean investigation of
Pinochet's finances.

"Dictators don't just kill their political opponents," Hertz said by
telephone in Santiago. "They always unlawfully enrich themselves,
and Pinochet isn't the exception."

Hertz filed a court petition to strip Pinochet of immunity from
prosecution and was granted access to some non-public information.

Pablo Rodriguez, a lawyer for Pinochet who spoke on Channel 13
television in Santiago, said the accounts were those of Chilean
military aides abroad.

The Senate report also said foreign affiliates of Banco Atlantico,
now owned by Spain's Banco Sabadell SA, transferred money from
Switzerland, Gibraltar and Spain to Pinochet's U.S. accounts.

The Pinochet family also had accounts at Coutts & Co. (USA)
International of Miami that were set up by family lawyer Oscar
Aitken, the report said. Once part of the international private
banking unit of the Royal Bank of Scotland Group Plc, the Coutts
unit was sold to Banco Santander Central Hispano SA in 2003.

"We have strict anti-money laundering controls and procedures and
cooperate with the relevant national authorities," said Santander
spokesman Peter Greiff. Coutts spokeswoman Carolyn McAdam said the
Edinburgh-based bank had no immediate comment.

Senate investigators noted in the report that the Federal Reserve
Bank of New York conducted three major audits between 1996 and 1998
to correct deficiencies in the money laundering efforts at
Citibank's private banking operation.

Sen. Carl Levin, a Michigan Democrat who helped direct the probe,
said that Citigroup's violations weren't as serious as those by
Riggs.

In January, Riggs pleaded guilty to U.S. money laundering charges
and agreed to pay $8 million to the victims of the Chilean
dictatorship, which the U.S. government cited for human rights
violations. Riggs admitted helping Pinochet and the leaders of oil-
rich Equatorial Guinea launder millions of dollars and agreed to pay
a $16 million fine.

The subcommittee found a total of 28 accounts that Pinochet, his
relatives, and Chilean military officers kept at Riggs Bank over a
25-year period from 1979 to 2002.

Last year, Senate investigators reported that Pinochet had just nine
accounts at Riggs over an eight-year period. Instead the banking
relationship spanned the years 1979 to 2004, according to the latest
findings.

Riggs spokesman Mark Hendrix said the report shows that
problems "depicted as unique to Riggs unfortunately appear to be
systemic in the banking system today.'

Riggs National Corp., the holding company that controls Riggs,
agreed to be bought by PNC Financial Services Group Inc. for $652
million, or $20 a share. Pittsburgh-based PNC cut the price it
originally agreed to pay by 18 percent after the guilty plea. The
U.S. judge who took the Riggs plea questioned whether the fine was
sufficient. He scheduled sentencing for March 29.

----------------------------------------------------

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

To unsubscribe, send an e-mail to:

gata-unsubscribe@yahoogroups.com

----------------------------------------------------

RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS

Free sites:

http://www.jsmineset.com

http://www.cbs.marketwatch.com

http://www.mineweb.com/

http://www.gold-eagle.com/

http://www.kitco.com/

http://www.usagold.com/

http://www.GoldSeek.com/

http://www.GoldReview.com/

http://www.capitalupdates.com/

http://www.DailyReckoning.com

http://www.goldenbar.com/

http://www.silver-investor.com

http://www.thebulliondesk.com/

http://www.sharelynx.com/

http://www.mininglife.com/

http://www.financialsense.com

http://www.goldensextant.com

http://www.goldismoney.info/index.html

http://www.howestreet.com

http://www.depression2.tv

http://www.moneyfiles.org/

http://www.howestreet.com

http://www.minersmanual.com/minernews.html

http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html

http://www.goldcolony.com

http://www.miningstocks.com

http://www.mineralstox.com

http://www.freemarketnews.com

http://www.321gold.com

http://www.SilverSeek.com

http://www.investmentrarities.com

http://www.kereport.com
(Korelin Business Report -- audio)

http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)

http://www.resourceinvestor.com

http://www.miningmx.com

http://www.prudentbear.com

http://www.dollarcollapse.com

http://www.kitcocasey.com

Subscription sites:

http://www.lemetropolecafe.com/

http://www.goldinsider.com/

http://www.hsletter.com

http://www.interventionalanalysis.com

http://www.investmentindicators.com/

Eagle Ranch discussion site:

http://os2eagle.net/checksum.htm

Ted Butler silver commentary archive:

http://www.investmentrarities.com/

----------------------------------------------------

COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS

Blanchard & Co. Inc.
909 Poydras St., Suite 1900
New Orleans, Louisiana 70112
888-413-4653
http://www.blanchardonline.com

Centennial Precious Metals
3033 East First Ave., Suite 807
Denver, Colorado 80206
1-800-869-5115
http://www.USAGOLD.com
Michael Kosares, Proprietor
cpm@usagold.com

Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
http://www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net

El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net

Gold & Silver Investments Ltd.
Mespil House
37 Adelaide Rd
Dublin 2
Ireland
+353 1 2315260/6
Fax: +353 1 2315202
http://www.goldinvestments.org
info@gold.ie

Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com

Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com

Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
http://www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com

Lone Star Silver Exchange
1702 S. Highway 121
Suite 607-111
Lewisville, Texas 75067
214-632-8869
http://www.discountsilverclub.com

Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel

Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
314-965-9797
1-800-280-9797
http://www.mocoin.com

Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com

Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com

The Moneychanger
Box 178
Westpoint, Tennessee 38486
http://www.the-moneychanger.com
Franklin Sanders
1-888-218-9226, 931-766-6066

----------------------------------------------------

HOW TO HELP GATA

If you benefit from GATA's dispatches, please
consider making a financial contribution to
GATA. We welcome contributions as follows.

By check:

Gold Anti-Trust Action Committee Inc.
c/o Chris Powell, Secretary/Treasurer
7 Villa Louisa Road
Manchester, CT 06043-7541
USA

By credit card (MasterCard, Visa, and
Discover) over the Internet:

http://www.gata.org/creditcard.html

By GoldMoney:

http://www.GoldMoney.com
Gold Anti-Trust Action Committee Inc.
Holding number 50-08-58-L

Donors of $1,000 or more will, upon request,
be sent a print of Alain Despert's colorful
painting symbolizing our cause, titled GATA.

Donors of $200 or more will receive copies
of "The ABCs of Gold Investing" by Michael
Kosares, proprietor of Centennial Precious
Metals in Denver, Colorado, and "The Coming
Collapse of the Dollar" by James Turk and
John Rubino.

GATA is a civil rights and educational
organization under the U.S. Internal Revenue
Code and contributions to it are tax-deductible
in the United States.