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Four Miami banks could be forced to turn over client documents and make employees available for questioning if a Miami federal judge approves a request by Chilean authorities who are investigating “fraud, corruption, kickbacks and conspiracy” allegations against that nation’s former president, Gen. Augusto Pinochet. Chile’s office of the attorney general — Consejo de Defensa del Estado — asked the U.S. District Court in Miami late last month to order the banks to cooperate. The institutions are Espirito Santo Bank; Banco de Chile’s office in Miami; PNC Corp., which in May bought the troubled Riggs International Banking Corp.; and Banco Santander International, which in 2003 bought the Coutts & Co. Chilean investigators are also seeking authority to depose Miami international banker Edgar W. Tatman, who from the early 1980s to 1991 administered alleged Pinochet accounts at Riggs International, the McLean, Va.-based bank that came under federal scrutiny over its management of accounts belonging to foreign diplomats and other officials. Riggs maintained a Miami office that is now closed. Tatman took the Pinochet accounts with him when he moved from Riggs to Espirito Santo Bank in September 1991, according to court documents. He could not be reached for comment. Pinochet, 89, rose to power in a military coup that overthrew President Salvador Allende on Sept. 11, 1973. Last week, he was stripped of immunity from prosecution in the government’s investigation of a cover-up of more than 100 deaths of political opponents in 1975. More than 3,000 dissidents perished during Pinochet’s presidency, which lasted until 1990. He retained his title as commander-in-chief of the Chilean army for eight more years. In 1998, he was appointed “senator for life,” while being pursued internationally for human rights violations and domestically for possible corruption. The Chileans’ corruption probe of Pinochet originated in the late 1990s. The government’s petition asks U.S. District Judge Joan A. Lenard to grant them authority to question Miami bank officials under an 1864 law that permits foreign tribunals involved in a criminal or civil case to obtain information from parties in the United States. Chile’s lead investigator, special minister and judge Sergio Mu�oz Gajardo, hopes the Miami bankers will tell him what they know about illicitly obtained funds that landed in American accounts controlled by Pinochet; his wife, Lucia Hiriart Rodriguez; his attorney, Oscar Aitkens; and other confidants. In court documents, the Chileans say their investigation has identified an estimated $17 million that moved through Pinochet’s accounts in the United States, even though the general declared in his income tax returns that he earned $661,732.92 from 1973 through 2004. Through May 7, 1998, the Chilean government says in its petition, the general and his wife had declared their total assets to be $853,526. “Absent discovery from the Miami banks, CDE and Judge Mu�oz shall likely be unable to discover fully the source of Augusto Pinochet’s wealth,” according to the Miami petition. “In this same vein, undoubtedly they shall be materially hampered in their ability to recovery any of the public funds.” The Chilean government alleges that Pinochet maintained more than 100 accounts, certificates of deposit and other transactions under 13 aliases — many using his mother’s maiden name Ugarte — as well as 10 corporations in an attempt to hide the real benefactor of the funds. The petition says Chilean officials want to know whether Pinochet opened his U.S. accounts with the help of forged certificates and four fake passports. Judge Lenard will have to make her decision based on legal arguments and documentation submitted to the court by the Chilean government’s Miami attorney, Pedro J. Martinez-Fraga, shareholder of Greenberg Traurig in Miami. None of the Miami banks has been formally notified of the Chileans’ legal efforts to obtain their records and question their employees. Espirito Santo Bank’s president and chief executive Mark North said he would obey any court ruling. “We would always follow the law,” said North, who joined the Florida-based bank two years ago. PNC Bank, which owns Riggs, would not comment. Banco de Chile and Banco Santander International, which owns the former Coutts operations in Miami, did not return telephone calls. The request to depose the Miami banks comes four months after a U.S. Senate committee report disclosed that several U.S. banks had accounts linked to Pinochet. Before ruling, Judge Lenard has asked Martinez-Fraga to provide additional certified documentation to the court by July 28. A ruling is expected by mid-August. If the request were to fail, Chilean officials could appeal the decision to the 11th U.S Circuit Court of Appeals in Atlanta. Another option would be for the Chilean government to seek the U.S. government’s assistance in petitioning for court approval. Victor Alvarez, managing partner of White & Case in Miami and not involved in the case, said foreign governments are within their rights to seek U.S. court authority to compel testimony, depositions and interrogatories. He said the foreign governments must demonstrate that the material is important and provides certain protections for the witnesses. “There are confidential aspects to this,” Alvarez said. “So the request would have to be tailored narrowly and balanced against the confidential aspects.” The Pinochet case already has triggered repercussions for the U.S. banking industry. Riggs Bank’s involvement with the Chilean leader led to a severe reprimand, possible criminal proceedings, more than $25 million in fines and the forced sale of the bank in May for about $652 million. Banco de Chile was slapped with a cease-and-desist order in February for violating anti-money laundering laws. Martinez-Fraga said his request is narrowly focused in that it seeks information on specific names and entities that appear to have had accounts at the four Miami banks. He said he has no intention of making the depositions public, which could potentially expose the banks to their own regulatory problems. “I have no intention of publishing these,” said Martinez-Fraga, who would be the likely person to conduct the depositions in Miami. “All I want to do is give them [the depositions] to the CDE — the attorney general’s office down there — so they can do with them what they want. Theoretically, the only use that the documents will have will be to assist in the criminal prosecution of Pinochet.” Daily Business Review reporter Julie Kay contributed to this story.

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