updated 3/15/2005 11:11:25 PM ET 2005-03-16T04:11:25

Citigroup, Bank of America and seven other banks enabled former Chilean dictator Augusto Pinochet and members of his family to build a sprawling secret network of accounts to conceal his wealth, Senate investigators charge in a new report.

One of those institutions, Riggs Bank, had a relationship with Pinochet that was far more extensive and long-standing than previously believed, the report finds.

The banks allowed Pinochet to use phony account names, offshore accounts and other deceptions to hide an estimated $13 million or more from U.S. examiners and international prosecutors seeking to seize his assets, according to the report by the staff of the Senate Governmental Affairs investigative subcommittee.

Some banks, including Riggs and Citigroup, had a relationship with Pinochet and his family going back 24 or 25 years, the investigators found. The accounts have since been closed. The investigators said all the banks cooperated with their inquiry.

The findings illuminate "another chapter in a very tawdry episode in American banking," Sen. Carl Levin of Michigan, the subcommittee's senior Democrat, said Tuesday.

Riggs pleaded guilty in January to a criminal felony charge of failing to report suspicious transactions to authorities, including those in Pinochet's accounts, and has agreed to pay $41 million in civil and criminal fines to the U.S. government.

The handling of Pinochet's accounts by Riggs managers came to light last July following an earlier, yearlong investigation by the Senate investigative panel. It found that managers at the Washington institution, working with Pinochet from 1994 to 2002, set up phony offshore companies to hide his assets. Pinochet's son, Marco Antonio Pinochet Hiriart, called the first report by the Senate investigators "mere lies."

But the new report, based on an additional five-month investigation, says Riggs' relationship with Pinochet and his family stretched from 1979 to 2004 and there were 28 Pinochet-related accounts and certificates of deposit at the bank — rather than the previously reported nine.

Riggs spokesmen didn't immediately return telephone calls seeking comment.

Citigroup, the largest U.S. financial institution, opened 63 accounts and CDs for Pinochet and another 19 for family members, and arranged international wire transfers, set up offshore companies and made large loans for Pinochet and his relatives, according to the report. In addition, it said, New York-based Citigroup provided some Pinochet family members with accounts, CDs and lines of credit in other countries, including Argentina, the Bahamas, Britain, Chile and Switzerland.

In a statement, Citigroup Inc. said its accounts for Pinochet, "which he opened with false documentation using pseudonyms, were shut down nearly a decade ago" and the bank began closing any remaining accounts for his children in 1998.

In the late 1990s, Citigroup was criticized by lawmakers for its handling of millions of dollars deposited by officials of several foreign countries who were accused of money laundering and corruption.

Bank of America Corp. maintained three accounts and as many as six CDs for one of Pinochet's daughters, Ines Lucia Pinochet, according to the 83-page report.

"Bank of America cooperated fully with the subcommittee in its investigation, conducted a thorough internal investigation and submitted documents as requested," the Charlotte, N.C.-based bank said in a statement. It said the accounts in question were closed last year.

The others named in the report are Banco de Chile in the United States; Espirito Santo Bank, Ocean Bank and PineBank in Florida; Banco Atlantico, now part of Banco de Sabadell; and Coutts & Co. (USA) International, now part of Spain's Banco Santander.

Officials at the Miami offices of Ocean Bank and PineBank didn't immediately return calls seeking comment. Spokesmen for Espirito Santo in Miami, Banco de Chile, Banco de Sabadell and Banco Santander couldn't be reached Tuesday afternoon.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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