fraud practiced on the Chilean government and amount to an extraditable offense under the Treaty.
III. Palma's False Document Indictment
The same day that the Export Subsidy Indictment was returned, the Chilean government filed a charge that Palma had submitted false export declarations to the Central Bank of Chile. It could be argued that, as charged, Palma's false declarations did not constitute a completed fraud. To my mind, however, this charge arises out of the exact same facts as the Export Subsidy Indictment.
Where two charges are so factually intertwined as to constitute a logical whole, both are extraditable as long as they meet the general treaty and case law requirements discussed above. See Shapiro v. Ferrandina, 478 F.2d 894 (2d Cir.), cert. dismissed, 414 U.S. 884, 94 S. Ct. 204, 38 L. Ed. 2d 133 (1973) (citing United States v. Paroutian, 299 F.2d 486 (2d Cir. 1962)). Therefore, because the export subsidy charge is extraditable, so is the false document charge which derives from the same set of facts. Nothing further need be said.
IV. Palma's Bankruptcy Fraud Indictment
On April 23, 1991, the Chilean government issued an indictment charging Palma with bankruptcy fraud in that he "concealed property;" he "disposed of property to the detriment of his creditors," and, "with the intention to postpone the bankruptcy . . . he employed . . . ruinous means to generate funds."
Palma's actions concerning the VAT and export subsidy frauds would make little sense unless he had devised a scheme to take the ill-gotten gains out of his various corporations for his own personal benefit. After orchestrating just such a scheme, Palma allegedly decided to plunder his corporations when he realized that the Chilean government was close to discovering his crimes. Given this scenario, the bankruptcy fraud indictment clearly falls within the meaning of the word "fraud"
as found in the Treaty. The corporations' phony books were the misstatements. The victims of the fraud were the creditors of the corporations and, perhaps, the other stockholders. Finally, the scienter was Palma's intent.
V. Palma's Other Arguments
Palma also argues that the evidence is insufficient to hold him for extradition to Chile. I totally disagree with this argument. The hearing in an extradition proceeding is not a true "evidentiary hearing." The Federal Rules of Evidence do not apply when measuring the quantum of proof forwarded by the demanding country. Our rules of evidence are exclusionary in nature. American Courts commonly refuse to admit excellent highly probative evidence. A court sitting as an extradition tribunal, however, must recognize that evidence which is inadmissable here may be admissable in code countries like Chile. For example, hearsay is often admitted in a code countries since, given proper weight, it may be very persuasive. With this in mind, I have reviewed the evidence submitted by Chile in support of its demand for extradition and I find it to be sufficient to show probable cause that Palma is guilty of the crimes charged.
As to Palma's taking issue with the piecemeal manner in which the Chilean government filed the indictments and the way in which the United States has handled the matter, I do not believe that either of these factors bears on this particular case. It is quite normal in a criminal investigation for the authorities to discover facts and further crimes as the investigation progresses. That Palma was first charged with one crime and then with an additional one really is of no import. Neither is the opinion of some United States government functionary who might have handled the extradition request.
Under the circumstances, extradition is to be ordered. However, the extradition is not to proceed for ten days so that Palma may, if he so desires, initiate a review of his status as a prisoner held for extradition. Therefore, ten days from the date hereof, the government is to submit the appropriate order of extradition.
DATED: New York, New York
February 10, 1992
KEVIN THOMAS DUFFY, U.S.D.J.