MercoPress. South Atlantic News Agency

Pinochet's son detained for alleged tax fraud.

Former Chilean dictator Augusto Pinochet oldest son was arrested Thursday in connection with allegations of tax fraud, authorities reported in Santiago.

Augusto Pinochet Hiriart was detained and initially questioned by prosecutor Vinko Fodich. He was later taken to Curico, 125 miles south of the capital, where the case is being investigated. Judge Carlos Gutierrez ruled that he will remain in custody until Saturday.

The case dates back to May 2003 when authorities discovered a network that forged auto sale invoices to illegally collect value-added-tax refunds. Initially, investigators indicated that the gang had swindled over half a million US dollars in illegal refunds.

Carlos Araya Pulgar, the first alleged member of the network to be detained, implicated Pinochet Hiriart in the tax fraud scheme, and his accusations were backed up by the testimony of four other witnesses.

Pinochet Hiriart's arrest coincides with an announcement by Chile's internal revenue service, or SII, that it has begun an audit of his father's tax returns after a U.S. Senate investigating panel determined that the former strongman had several secret million-dollar accounts in Washington's Riggs Bank.

The aging former dictator's oldest son had an undistinguished military career, cut short by an accident in 1974 when he had only reached the rank of captain. He has been implicated in several illegal activities, which have prompted his siblings to distance themselves from him.

A scandal was touched off in 1989 when it was revealed he had received three checks totaling 3 million US dollars in commissions from the Army - at that time headed by his father - for allegedly serving as middleman in the purchase of a rifle factory.

The case prompted a legislative investigation and a suspicious mobilization of troops, but in 1994 then-President Eduardo Frei ordered the attorney general's office to end the probe "for reasons of state".

Pinochet Hiriart caused another stir when his wife shot him in the leg and shortly after divorced him, but not before he had put all his assets - allegedly acquired in the late 1970s in the United States - in her name.

A few years ago he was involved in yet another family dispute when he launched a new label of wine with his father's name.