Pinochet charged with tax fraud, passport forgery

SANTIAGO, Chile - Former Chilean dictator Augusto Pinochet was put under house arrest on Wednesday after being charged with tax fraud and passport forgery related to $27 million ($NZ39.53 million) stashed in secret bank accounts under false names.

Judge Carlos Cerda, who is also the prosecutor on the case, issued the indictment, confined Pinochet to his home and set bail at US$23,000. Additional charges include using false documents and incomplete statement of assets.

Pinochet, who will turn 90 on Friday, has been indicted in two human rights cases in the last five years, but the cases were thrown out by courts that ruled his mild dementia, caused by frequent mini-strokes, made him unfit to face trial.

Human rights lawyers have pushed for years to convict Pinochet in thousands of cases of torture and killings by secret police under his 1973-90 rule, but the recent bank accounts case is the one case that has gathered momentum.

"Today (he's charged with) economic crimes, let's hope that tomorrow it's for the genocide that took place during 17 years of dictatorship," Lorena Pizarro, president of one of Chile's biggest human rights groups, said at the Santiago tribunal building.

Pinochet recently underwent physical and psychiatric exams to see whether he was well enough to face a criminal process and it is not clear whether his defence will be able to block the new charges on health grounds.

MILLIONS IN BACK TAXES

The indictment says Pinochet evaded US$2.4 million in taxes between 1980 and 2004. His defence says he paid back most of that earlier this year.

His wife and youngest son are out on bail after they were arrested in August and charged as accomplices in tax evasion and using false passports to help move the money between accounts.

"We are going to appeal these charges and at the same time we are going to appeal the amount of the bail because Gen. Pinochet does not have $23,000 since all of his money has been frozen by the courts," said Pinochet lawyer Pablo Rodriguez. Rodriguez called the indictment an embarrassment because Pinochet is too unwell to testify.

Pinochet's off-shore bank accounts came to light last year in a US Senate investigation of possible money laundering at US banks. Chile's courts then investigated Pinochet's finances and found more than a hundred bank accounts in several countries under different names.

Judge Cerda is also investigating Pinochet for embezzlement and whether some of the money came from kickbacks from European weapons manufacturers. Those accusations were not included in the indictment.

"According to us, the money is illicit," said Carmen Hertz, a human rights lawyer who helps prosecutors on the case.

More than 3,000 people died in political violence and tens of thousands were tortured or exiled during Pinochet's rule, which began with a military coup.

A center-left coalition led by former exiles has ruled Chile democratically since 1990 and Pinochet is politically irrelevant. Even many loyal supporters -- who said Pinochet rid Chile of communism -- abandoned him when the bank accounts scandal surfaced.

In October, Pinochet lost his immunity from prosecution in the accounts case. Former leaders in Chile cannot be prosecuted unless courts lift immunity on a case-by-case basis.

If the tax fraud charges move forward, Pinochet will be tried under Chile's old justice system without open courtroom hearings. Instead, Cerda will continue to gather evidence and question witnesses until he believes he has enough evidence to convict or, if not, to dismiss charges.

- REUTERS