In Santiago, Chile, a prominent lawyer, Luis Hermosilla, has been ordered to remain in custody pending trial on charges of money laundering and tax fraud, following a court decision after five days of hearings. The case has sent shockwaves through Chile’s corporate and political circles. The scandal emerged last November when leaked audio recordings suggested Hermosilla discussing bribes with a former client intended for officials at Chile’s main market regulators. Despite denying the charges, Hermosilla has not disputed the authenticity of the recordings, with his lawyer claiming he was manipulated into the conversation about illicit payments.
The corruption investigation has ensnared judges, politicians, and top businessmen, tarnishing Chile’s reputation as one of the least corrupt countries in the Latin American region and threatening its standing as an international financial hub. In a related development, another lawyer, María Leonarda Villalobos, and her husband, Luis Angulo, were also charged with money laundering and tax crimes but have denied any wrongdoing. While Hermosilla and Villalobos were ordered to be held in custody until trial due to concerns they might obstruct the investigation, Angulo was placed under nightly house arrest.
The initial audio recording was disclosed by investigative outlet Ciper Chile, revealing discussions involving Hermosilla, Villalobos, an unidentified lawyer, and businessman Daniel Sauer concerning potential bribes to officials at Chile’s tax authority and financial regulator in connection to legal issues facing Sauer’s brokerage firm. The scandal has since expanded to implicate Sauer, his brother, and business partner in a fraud case, despite their denial of any misconduct.
Following the scandal’s eruption last year, investigations into Chile’s tax authority and Treasury ensued, resulting in the indictment of officials on bribery charges for allegedly accepting payments from Villalobos. Prosecutors allege that Hermosilla, Villalobos, and Angulo profited from their client’s illicit funds, receiving millions from companies linked to the Sauer brothers and their associate, while also being accused of evading approximately $900,000 in taxes.
Prior to the scandal, 68-year-old Hermosilla was a highly influential lawyer in Chile, representing notable figures like Miguel Crispi, chief adviser to current President Gabriel Boric, and serving as an advisor to Andrés Chadwick, an ex-interior minister under former President Sebastián Piñera. Despite Chile being ranked as the second-least corrupt country in Latin America by Transparency International, a series of corruption cases involving influential figures has eroded public trust in the country’s political establishment.
