Coutts' US arm linked to Pinochet

AN investigation into Riggs, the so-called Diplomats' Bank, has led to revelations that former Chilean dictator Augusto Pinochet hid and laundered millions of dollars through a web of more than 100 banks including the US arm of the Queen's bank, Coutts.

Pinochet had 63 accounts with Citigroup alone and others with Bank of America, Banco de Chile and Coutts (USA) International ? which was sold in 2002 by Royal Bank of Scotland to Abbey owner Banco Santander of Spain.

A report to be released today by the US Senate Permanent Subcommittee on Investigations says that at least $15m (£7.8m) went through the accounts.

Riggs has admitted to failing to report suspicious transactions and has paid a fine. Pinochet, who murdered and tortured thousands of opponents during his 17-year rule of Chile, also used accounts at Banco de Chile and Espirito Santo Bank, the report says. Related accounts and transactions were also found at at least five other banks, including Bank of America, according to the report, but Pinochet's most numerous accounts were with Citigroup, where they were handled by Citibank Private Bank.

'New information shows that the web of Pinochet accounts in the US was far more extensive, went on far longer and involved more banks than was previously disclosed,' said Michigan Senator Carl Levin. 'Some banks activelyhelped him hide his funds, others failed to comply with US regulations requiring banks to know their customers.'

The report shows Pinochet had the longest and closest link with Riggs. Rather than the nine accounts first reported, it involved 28 and spanned 25 years, not eight. Riggs, a unit of Riggs National, also opened accounts for Chilean military officers which were used to funnel $1.7m to Pinochet-linkedaccounts, the report said.

Citigroup opened the first Pinochet account in 1981 and continue to provide facilities for him and his family until last year, arranging wire transfers, establishing offshore entities, issuing credit cards and making loans. Levin accused Citigroup of failing to conduct enough due diligence to determine the identity of its customers and the sources of their funds.

'We don't want to compare Citibank with Riggs,' Levin said. 'On the other hand, there was sloppiness and failure to know your customer, which they were supposed to do?and we can't let them off the hook. We believe [Citibank's] failure to know their customer violated internal policies and general requirements of the regulators, but no specific regulations.'