Tax fraud, prosecution for harassment: unraveling the legal problems encountered by the ex-king of Spain Juan Carlos I | Spain

Former Spanish King Juan Carlos on a private visit to Germany in 2006. Corinna Larsen walks behind him.WOLFGANG LIST / Action Press (© KORPA)

The cloud of legal problems hanging over Spain’s King Emeritus Juan Carlos I is beginning to dissipate. On Monday, Swiss justice suspended an investigation into a payment of 100 million dollars (65 million euros) made to a secret account of the Swiss bank Mirabaud & Cie, which the former monarch received in August 2008, while ‘he was still the head of state. This money was transferred by order of the Saudi Minister of Finance to an account belonging to Juan Carlos I on behalf of a Panamanian foundation called Lucum.

The abandonment of the three-year investigation, led by the Swiss prosecutor Yves Bertossa, puts a definitive end to the legal proceedings initiated by Juan Carlos in Switzerland. Although the former monarch is not under investigation, he could have been called to testify.

Since 2018, the Geneva public prosecutor’s office has been investigating alleged bribes for the contract to build the AVE high-speed rail link to Mecca, Saudi Arabia. In the court document to dismiss the case, Bertossa said there was not enough evidence to link Saudi Arabia’s $ 100 million payment to Juan Carlos to the decision to award the contract to a Spanish consortium, nor to the fact that the consortium lowered its offer price by 30%.

However, in the court document, Bertossa also noted that there was a desire to “hide” the identity of the recipients and senders of the money – via the Lucum foundation – from the Swiss bank Mirabaud & Cie, which has opened the account where the $ 100 million transfer was made.

This lender was also fined € 48,000 for failing to inform the Money Laundering Communications Office (MROS) of two additional payments received by Juan Carlos’ former lover, Corinna Larsen: a of $ 5 million (4.4 million euros), which it received from the National Bank of Kuwait, and another transfer of $ 2 million (1.7 million euros) from Bahrain. Larsen, a Monaco-based businesswoman who continues to use the aristocratic title of her German ex-husband, zu Sayn-Wittgenstein, received these payments shortly after Juan Carlos made official visits to the two countries. .

The scandal of these and other financial irregularities prompted Juan Carlos to move to Abu Dhabi, where he has lived since August 2020. Sources close to the former monarch say he wishes to return to Spain, but it is unlikely that it happens first and foremost. outstanding legal issues are resolved.

With the Swiss case closed, Juan Carlos is now waiting for Spanish Supreme Court prosecutors to decide how to proceed in three investigations into allegations of tax evasion and other offenses involving international companies. But it is likely that these investigations will also be dropped given that some of the crimes under investigation have clearly exceeded the statute of limitations, while others relate to actions prior to 2014, when Juan Carlos was the beneficiary of the statute of limitations. immunity thanks to his status as reigning monarch. Regarding the alleged undeclared gifts, the former monarch filed two tax regularizations in December 2020 and February 2021, meaning this case can no longer be pursued in court.

If those investigations are also dropped, the only remaining case against Juan Carlos will be a civil lawsuit filed by Larsen for alleged harassment, illegal surveillance and defamation.

Here is an explanation of the legal issues facing the King Emeritus of Spain.

What was the Swiss prosecutor Yves Bertossa investigating?

Bertossa was investigating an alleged $ 100 million bribe to Juan Carlos in 2008, for the contract to build the AVE high-speed rail link to Mecca, which was awarded to a Spanish consortium. Bertossa found that the consortium had reduced its bid for the final phase of the project by 30%. The Swiss prosecutor was trying to determine whether three people – Larsen, who received an alleged donation of $ 100 million from the former king in 2012; Arturo Fasana, commercial director of Juan Carlos who managed the Swiss bank account; and lawyer Dante Canónica, director of the Lucum Foundation – are guilty of money laundering. Mirabaud & Cie bank was also the subject of an investigation as a legal person. The penalty for this crime can be up to five years in prison.

Why was Juan Carlos not one of the people investigated?

Although the investigation focused on a payment of $ 100 million received by Juan Carlos, the King Emeritus was not under investigation. He was also not called to testify. According to sources familiar with the matter, the possibility that Juan Carlos was granted immunity as head of state during the period in which the transfer took place influenced the decision of the Swiss prosecutor.

Has the $ 100 million in the Swiss bank account been declared to the Spanish tax authorities?

No, the money was not declared. Fasana, who managed the bank account and has been linked to other corruption cases including Gürtel’s infamous bribe program in Spain, told Bertossa that 80% of his clients do not report the money they hold in Switzerland. The Swiss bank also neither asked Juan Carlos if he had declared the funds, nor demanded that he do so.

Why was the case closed?

The Swiss prosecutor claimed that the three people under investigation – Larsen, Fasana and Canónica – were interested in hiding the payment, which is why it was given to a foundation based in Panama. Bertossa found that no proper explanation had been given for the transfer of $ 100 million, nor for other payments from Bahrain and Kuwait. But he admitted that the investigation, despite the multiple testimonies of the three and the proceedings initiated, could not prove that the payment of 100 million dollars received by Juan Carlos I from the Saudi Minister of Finance was a bribe. wine for the construction contract for the AVE rail link.

What cases are pending against Juan Carlos in Spain?

Spanish Supreme Court prosecutors are due soon to decide how to proceed in three investigations involving Juan Carlos I.

The first investigation concerns the possible payment of bribes for its role in securing a contract with Saudi Arabia that was awarded to a Spanish consortium of countries to build an AVE high-speed rail link to Mecca. The second is an investigation into the alleged use of funds by a Mexican businessman, friend of Juan Carlos, via a leader. And the third concerns the former monarch’s alleged link with a trust in Jersey, in the Channel Islands, which he denied. All three investigations have been extended for six months, with Spanish investigators waiting for the information requested from Swiss prosecutors to be provided.

What other investigations outside of Spain is Juan Carlos facing?

Corinna Larsen filed a lawsuit against Juan Carlos in London for alleged harassment, illegal surveillance and defamation. The Monegasque businesswoman, who had had a romantic relationship with Juan Carlos, requested an injunction prohibiting the King Emeritus from contacting, following, defaming or approaching her within 150 meters of her.

At the end of December 2020, Larsen detailed the harassment she claims to have suffered in the context of her trial, attributing the events to Juan Carlos I directly or to personalities acting on her behalf. Among them was Félix Sanz Roldán, the former director of the Spanish secret services of the CNI. Larsen argued that the behavior was aimed at persuading her to return a € 65 million gift that Juan Carlos had transferred to him “irrevocably” in 2012, or to resume their relationship.

In the broad lawsuit, the businesswoman recounted the alleged threats, electronic surveillance and control she claims to have been subjected to, and her team of consultants, as well as the series of allegations against her. The consequences of all this, according to legal documents, were anxiety and distress which necessitated medical treatment, led to the deterioration of her relationship with her children and other family members, and the loss of her family. ‘many of his wealthy clients.

But the success or not of this case depends on whether Juan Carlos – as his lawyer argues – still enjoys immunity from prosecution as a “sovereign”.

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