Tax irregularities that “far exceed” the threshold of the crime, signs of bribery and a possible crime of money laundering. The reports of the Prosecutor’s Office on the acts allegedly committed by Juan Carlos I that have been the subject of investigation by the public ministry constitute a devastating account of the conduct of the person who was head of state between 1975 and 2014.
The now emeritus king used, while he reigned, the inviolability recognized by the Constitution to gather a fortune that he hid from the Treasury from unknown businesses or donations from friends. In the first years, the main concern of the then monarch was, according to the file decrees of the Prosecutor’s Office notified this Wednesday, to ensure an economic cushion in the event that a coup d’état or some similar political movement was carried out. the still unstable Spanish democracy and, with it, the monarchy. At the end of his reign and after his abdication, Juan Carlos I’s obsession was to financially support a high standard of living, with private flights and luxury accommodations that he could hardly afford with the allocation linked to his position. .
Faced with the feeling of impunity in which the first decades of his reign passed, in recent years he was aware that although he never had to be held accountable in court, some of these behaviors could take their toll on Spanish public opinion. “In 2004 the political situation in Spain was stable, the heir, today King Felipe VI, had just married, the monarchy enjoyed prestige and public knowledge of the existence of the trusts [fideicomisos]with the presence in them of D. Manuel de Prado —already convicted by the National High Court—, would have required embarrassing explanations”, says the head of the Anti-Corruption Prosecutor, Alejandro Luzón, in the file decree on the last of the investigations open to the king emeritus, the one referring to money supposedly hidden in a trust financier domiciled in the tax haven of the Channel Islands.
The public ministry has verified numerous irregularities committed by Juan Carlos I, but has renounced suing him in the Supreme Court, understanding that the inviolability that he enjoyed while he reigned, the prescription of possible crimes or the fiscal regularizations presented by the king emeritus in 2020 and 2021 close the door to judge the previous head of state. However, the two decrees signed this Wednesday by Luzon to unravel the three open investigations against the previous monarch unravel step by step numerous irregularities committed before and after his abdication.
The AVE contract and signs of “bribery”.
The Prosecutor’s Office considers it proven that Juan Carlos de Borbón was “the true owner” of the Mirabaud bank account in Geneva in the name of the Lucum foundation, which in 2008 received a transfer of 64.8 million euros from the then King of Saudi Arabia, Abdullah bin Abdulaziz. During the years that it was kept open, between 2008 and 2012, the fee defrauded in each financial year “far exceeds”, according to the Public Prosecutor’s Office, the limit of 120,000 euros that article 305 of the Penal Code establishes as the tax crime threshold. However, the irregularities committed between 2008 and 2011 would be prescribed, and those of 2012, in any case, were committed when Juan Carlos I was inviolable, so the Public Ministry considers that it cannot prosecute these actions.
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The investigation has not been able to establish, “even in an indicative way”, any link between that income of almost 65 million euros in the account of the Lucum foundation and the award of the works of the AVE to Mecca. But the public ministry does not rule out that this transfer hid another crime. “Discarding the participation of the previous head of state in a crime of corruption in business, it is possible to consider the possibility that the deposit of 100 million dollars (64,884,405 euros) in an account of the Lucum foundation in the Mirabeaud bank ordered by the king of Arabia in favor of the then king Don Juan Carlos I constitutes a crime of improper passive bribery, ”says the prosecutor. But that crime, if it existed, prescribes after five years, so the investigators even refuse to analyze whether the acts allegedly committed by the king emeritus have criminal charges.
A possible laundering
The file decree also cites a possible crime of money laundering for financial and corporate operations carried out between 2008 and 2012 “by order of the then King of Spain” after the receipt of 64,884,405 euros in Lucum’s account. Beginning with the entry on August 8, 2008 of 64,884,405 euros into the open account of the Lucum Foundation “it would be an act of concealment or cover-up of the gift, if any, improperly accepted, which initially would allow the corresponding conjugations to be understood verbs set forth in art. 301″. “However”, adds the prosecutor, “even expressly included in this precept by Organic Law 5/2010, of June 22, the so-called “self-laundering” which, on the other hand, had previously been admitted by the jurisprudence —clearly from the Non-Jurisdictional Plenum of the Second Chamber of July 18, 2006—, the aforementioned conduct would be close to the so-called unpunished self-concealment, understanding that the simple concealment of the assets committed by the perpetrator of the crime from which they originate, with full temporal connection among the typical acts and with no other motivation than to procure impunity for the initially committed act, does not add any additional illegality to the preceding criminal conduct.”
The letter cites other operations from which there could be evidence of money laundering, but they were all committed before 2012, so any possibility of acting against the king emeritus now collides with the inviolability he then enjoyed: “Having ceased in June 2012 the economic relationship of Don Juan Carlos de Borbón with the funds that were transferred to him by order of the King of Saudi Arabia, the questionable crime of money laundering, which would not be prescribed, would in any case be covered by the aforementioned inviolability that the article 56.3 of the Spanish Constitution recognizes the head of State”.
Regularized donations from businessman Allen Sanginés-Krause.
The Prosecutor’s Office considers it proven that Juan Carlos de Borbón has been the real beneficiary of the money transfers that a businessman of Mexican origin made, between 2016 and 2019, in favor of Nicolás Murga Mendoza, a military man now retired but who in 2007 was appointed aide-de-camp to the King’s House. “The total amount of these transfers, which amounts to 471,673.59 euros, has been used to pay for trips made by His Majesty Don Juan Carlos de Borbón y Borbón, as well as by his relatives or close friends,” says the prosecutor, who notes that Sanginés-Krause also paid “the health services provided during the years 2017 and 2018 by DMSS to SMD Juan Carlos de Borbón, through the entity Sociedad de Medicina Antiaginig y Longevidad Saludable SL, for a total amount of 95,365.75 euros” .
The Prosecutor’s Office maintains that there is no evidence “of any consideration for these transfers.” These are “unilateral acts carried out for profit”, so they are subject to inheritance and donation tax, warns the public ministry. Don Juan Carlos did not declare it at the time, but on December 9, 2020, his lawyer presented a complementary declaration to the Tax Agency with the following detail: “Fee to pay 556,412.50 euros, surcharges of art. 27 LGT [Ley General Tributaria] 83,461.89 euros, default interest 38,516.35 euros”. And he was accompanied by a letter in which he stated that the self-assessment responded “to the donations of Allen Sanginés-Krause”. The researchers take this regularization for good (although it was incorrect because the king emeritus was wrong but paying 16,748 euros too much), which exempts him from being accused of a tax crime.
Expenses covered by the Zagatka Foundation.
In addition to the money donated by the businessman Sanginés-Krause, the Prosecutor’s Office has gathered evidence that Juan Carlos I received numerous gifts after his abdication from the Zagatka Foundation, founded by his cousin Álvaro de Orleans. Private flights and accommodations that benefited both the king emeritus and some “relatives” whom the public ministry does not mention by his name. Investigators have not been able to determine the exact amount assumed by Zagatka under this formula. “However, the banking information received through the Geneva Canton Prosecutor’s Office in May, July and December 2021, as well as the content of the tax returns filed by the representation of SMD Juan Carlos de Borbón on the 2nd and 3rd of February 2021, allow to establish that between the years 2014 to 2018 the Zagatka Foundation, through bank transfers from its financial positions in Swiss entities […] paid to service providers […] substantial expenses for the use of private planes and lodging services, among others, caused by SMD Juan Carlos de Borbón y Borbón, as well as his relatives and close friends.” These donations were not declared by the king emeritus either, but the possible criminal liability has been settled with the tax regularization presented in December 2020.
The Jersey trust and the mysterious third beneficiary.
The public ministry has confirmed the existence of a trust, JRM 2004, constituted by Joaquín Romero Maura, advisor to Don Juan Carlos, with initial funds of 14,923,604 euros. The researchers maintain that this money, in turn, came from the liquidation of two other trusts created in Jersey by Manuel Jaime de Prado and Colón de Carvajal (who died in 2009), “a person very close” to the current king emeritus. The prosecution explains that both trusts they were fed with “donations from unidentified people who supported Don Juan Carlos between the 50s and 70s” and 9 million dollars donated in 1999 by Simeon of Bulgaria. According to the investigators, the objective was to help the then king in the event that he was deposed due to “an unconstitutional coup d’état or a similar situation.” Juan Carlos I was, says the Prosecutor’s Office, the “sole beneficiary” of him.
But, according to Romero Maura’s own account collected by the Prosecutor’s Office, in December 2003 the then king explained to him that the initial purpose of the trusts was already “unnecessary” and that, on the contrary, if its existence jumped to the Spanish public opinion it could be “embarrassing for the monarchy”, so it decided to close them. Since then, according to the public ministry, neither Juan Carlos I nor anyone around him have benefited from these funds. The Merit King left them in the hands of Romero Maura “in response to their friendship of many years and the services provided by his family to the monarchy for generations,” and with “the certainty” that “Romero Maura lived according to certain codes ethical that they were not going to change to receive that money”.
The investigators cite a letter sent by Romero Maura on July 17, 2009 to Barclays Wealth in which he recalls that he is the main living beneficiary of that trust and, after his death, his wife. But he proposes “two other classes of beneficiaries that he wants to be considered by the trustees [fideicomisarios] for the future”, explains the Prosecutor’s Office. The first of them is called “The Third Beneficiary”. “This is a contingent beneficiary because it depends, says Mr. Romero Maura, on the occurrence of certain improbable events, in circumstances that he describes as ‘troublesome times’. “It would be the person or persons who had resigned from the Head of State of Spain, due to an unconstitutional coup or other similar disqualifying circumstance.” The Prosecutor’s Office considers it “relevant” that this third beneficiary was never “formally designated by the trustees”, competent body of the trust to do so, “nor are there any further mentions of it in the available documentation”.
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