An information exchange between a Spanish judge and a Swiss prosecutor has shed new light on an ongoing investigation into alleged financial irregularities involving emeritus king Juan Carlos I, the father of Spain’s reigning monarch Felipe VI.

Spain’s High Court, the Audiencia Nacional, has been waiting for the Swiss justice system to relay information about an alleged bank account that was opened at the Swiss bank Mirabaud and the $100 million (€88 million) that was reportedly deposited in it as a payment from Saudi Arabia.

Swiss prosecutors are already investigating this account, opened in the name of Lucum Foundation, whose first beneficiary was Juan Carlos I, on suspicion of kickback payments for the contract to build the AVE high-speed rail link to Mecca, which was awarded to a Spanish consortium, as EL PAÍS recently revealed.

King Felipe VI recently announced he is relinquishing any inheritance from his father, after news emerged that he himself was a beneficiary of Lucum and another foundation named in the investigation.

The $65 million gift

In 2012, around $65 million (€57 million) was allegedly transferred from this account to Corinna Larsen, a Monaco-based businesswoman described as a close friend of Juan Carlos. Larsen has told investigators that the money was a donation from the former Spanish monarch, whom Swiss prosecutors name as the first beneficiary of the Mirabaud bank account. In Spain, High Court Judge Manuel García Castellón and anti-corruption prosecutors are investigating these alleged payments.

Of the $65 million that Juan Carlos allegedly donated to Corinna Larsen, €39 million was later transferred by the latter to one of her personal accounts at a US bank in late 2016 and 2017. This money ended up at Fieldpoint Private Bank, according to a request for judicial assistance sent by Swiss prosecutor Yves Bertossa to Judge Castellón, to which EL PAÍS has had access.

Part of the money, according to this document, was used by Larsen to purchase and refurbish two apartments at the exclusive Swiss ski resort of Villars-sur-Ollon, and to acquire a mansion in north London worth £5 million (€5.4 million).

The request for judicial cooperation sent by the Geneva prosecutor on August 16 describes the main findings of the Swiss investigation following a raid on the offices of the lawyer Dante Canonica and the fund manager Arturo Fasana, who were the administrators of the Lucum Foundation, whose first beneficiary was Juan Carlos I. The Mirabaud bank account was in the name of this foundation. On August 8, 2008 a deposit was made worth $100 million, as a donation from the Saudi royal house.

Part of the money was allegedly used by Larsen to purchase and refurbish two apartments at the exclusive Swiss ski resort of Villars-sur-Ollon

Bertossa is investigating alleged money laundering and kickback payments for the contract to build the AVE high-speed rail link to Mecca, a project that was awarded to a Spanish consortium headed by the construction giant OHL. According to the prosecutor, the winning companies had included in their offer “a 30% discount.” In his judicial request, Bertossa ties this project to the deposit that was made in the Lucum account, and to the later transfer of the money to an account held by Corinna Larsen in the Bahamas.

Robin Rathmell, Larsen’s lawyer, says that the money was “an unsolicited gift” and denies any commission payments. This legal representative says the timeline “clearly shows” that the money was received before the railway contract was awarded, and notes that kickbacks are paid by the winning companies, not by the country where the project takes place.

Loans

Judicial sources say that the request for information focuses on the discovery of the Lucum Foundation, whose beneficiary is the retired king, and on the money transfers that this foundation made to an entity called Siam Partner, held by Corinna Larsen. The transfers were described as loans, and Siam Partner was allegedly created by Larsen, according to the Swiss prosecutor’s document, in order to secure the loans from Juan Carlos I with the aim of purchasing two apartments at the Villar-sur-Ollon ski resort.

The first loan was made on May 28, 2009. The Lucum Foundation transferred €1,242,356 to an account held by Siam Partner at Switzerland’s Mirabaud bank, via an intermediary account that is also mentioned in the document. On October 15 of that same year, Larsen received a further €324,000 from Lucum at her HSBC account in Monaco. And on November 3 she received another transfer worth €150,000. Bertossa writes that these payments were tied to refurbishments made in both apartments.

Larsen described herself to investigators as “as a person who puts people in touch who want to create companies in the Middle East”

The document also notes that, under questioning as part of the Swiss investigation, Larsen described herself as “as a person who puts people in touch who want to create companies in the Middle East.” She also explained that she returned the loans in 2010 because she had received a $5 million (€4.6 million) payment from the State of Kuwait for services rendered. Bertossa notes that this money was paid a few days after Juan Carlos I visited the emir of Kuwait.

The Swiss prosecutor further notes that between October 27, 2011 and January 24 and 25, 2012, the Lucum Foundation’s Geneva-based account transferred a total of £1,596,000 (€1,732,587) to another account in the name of Riverhouse Partner, benefiting Larsen. Riverhouse Partner is a real estate company, and Bertossa writes that Larsen claimed Juan Carlos I had donated this amount so she could purchase an apartment in Eaton Square worth £5 million (€5,426,121).

Account closed

The prosecutor’s document notes that Juan Carlos I’s Swiss bank account was closed in June 2012 “due to new Swiss fiscal legislation” and that the monarch, who was still on the throne at the time, “signed an order to transfer the remainder of the money to Corinna Larsen at her account held in the name of the company Solare Investors Corporation at Gonet & Cie bank in Nassau (Bahamas). Among the transfers received by the Lucum account while it remained open, Bertossa mentions $1,895,250 (€1.7 million) by the sultan of Bahrein.

Bertossa writes that according to the individuals under investigation – Larsen, Canonica and Fasana – the $64.8 million transfer to Larsen was “an irrevocable donation by the former king of Spain to his close friend.” Larsen told investigators that the money paid for the refurbishment work at the Eaton Square apartment. These refurbishments cost around £4 million pounds (€4,340,055).

Larsen created a company named Mountain Lion Inc. with the alleged goal of receiving an unbuilt plot of land from the king of Morocco

The Swiss prosecutor also writes that in 2015 Larsen bought a mansion in the north of London worth £6 million (€6.4 million) thanks to a loan from Solare Investors in favor of a trust named Honeybird Group Corporation. In late 2016 and 2017, according to the Swiss investigation, Larsen transferred $42 million (€39.33 million) to her personal account at the US lender Fieldpoint Private Bank.

Bertossa also indicates in the request for information that Larsen created a company named Mountain Lion Inc., of which she was the beneficiary, with the purpose of receiving an unbuilt plot of land in Marrakesh “from the king of Morocco.” This property was worth 18 million dirhams (€1,712,865).

Bertossa’s document also mentions the Zagatka Foundation, and its beneficiary Álvaro de Orleans, a distant cousin of Juan Carlos I. The prosecutor notes that this foundation’s funds paid for many of the retired monarch’s private trips for a total of €3 million. Regarding the origin of these funds, Álvaro de Orleans told investigators that it was part of his father’s inheritance. The Zagatka Foundation’s Swiss account transferred €150,000 to Larsen’s HSBC account in Monaco on July 6, 2010.

Bertossa’s request for information also describes how the Lucum Foundation’s account was opened. According to this document, the lawyer Dante Canonica and the Geneva-based fund manager Arturo Fasana “were contacted by Juan Carlos I in order to create a structure to receive a donation.” The document states that Fasana met with the Saudi ambassador in Washington, and that the latter said the sum was “a simple, free donation” from the king of Saudi Arabia. In 2008 the king was Abdullah bin Abdulaziz, who passed away in 2015.

On May 27, 2019 Juan Carlos dropped all official activities and retired from public life. He abdicated the throne in 2014, in the wake of waning popularity fueled in part by a corruption scandal involving his son-in-law and by a hunting trip during which his relationship with Corinna Larsen emerged.

Juan Carlos, who served on the throne for 39 years and is widely credited with helping stop the February 23, 1981 coup attempt in Spain, has hired a former anti-corruption prosecutor, Javier Sánchez-Junco Mans, to represent him if he ultimately faces a judicial investigation.

English version by Susana Urra.