Rodrigo Rato, head of Bankia & ex-Minister of Economy, arrested for tax fraud

Rodrigo Rato, Spain’s senior banker, the man accused of hiding billions of euros in losses to inflate the shares of the state owned bank Bankia, ex head of the International Monetary Fund (2004-2007), Spain’s international banking expert and who used to be Minister of the Economy & Vice President under Aznar, was arrested today for grand fraud, money laundering and tax evasion.

The arrest is a massive slap in the face for the PP party. When Rajoy took office after the last elections, he publicly declared that “I will continue to follow the advice of Rodrigo Rato, because I am not stupid” – a phrase being constantly repeated on tonight’s news.

A judge ordered an investigation into his affairs after he took advantage of the recent tax amnesty to declare money in offshore bank accounts. The Tax Agency had noticed certain “irregularities” in his declaration and alerted fiscal police.

Police today executed a warrant to search his luxury apartment in Madrid, and found sufficient evidence to charge him. Police also searched the offices of a tax lawyer linked to Rato who lived in Sotogrande, Cádiz.

Reporters and bystanders were stunned to see the man lead out of his house handcuffed and escorted by Police.

Rato is believed to control a number of offshore companies, including companies in Gibraltar and other offshore havens, through which he funnelled hundreds of millions of euros which belonged not just to him but to other senior bankers and politicians throughout Spain.

He is also being investigated for having inflated the shares of Bankia, causing small investors to lose millions, and the case of “black credit cards”, unlimited credit cards coming straight out of bank accounts given to “friends” of Caja Madrid when he was on the board.

 

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