Paraguay's government must pay more than 80 million Swiss francs (US$62 million; Ђ51 million) in total to nine international banks that issued state-guaranteed loans later embezzled by a Paraguayan diplomat, Switzerland's highest civil court ruled Thursday.
The Federal Tribunal in Lausanne found that the banks had issued the loans in good faith and had good reason to trust the documents and state guarantees presented to them by the diplomat. The loans were given in 1986 and 1987.
The Lausanne court confirmed a ruling last year by a Geneva court, against which Paraguay had appealed. Paraguay cannot appeal against the latest ruling, the AP reports.
Levi Avzarrabel Benjamin, an Argentine who used the name Gustavo Gramont Berres given by his adoptive father, obtained the loans to build two factories in Paraguay.
Avzarrabel, a relative by marriage to the country's former dictator Alfredo Stroessner, served as Paraguay's honorary consul in Geneva from 1979 to 1989.
After Stroessner's regime fell in 1989, Avzarrabel was sentenced to seven years of prison for embezzlement and abuse of office.
In December 1998, he was extradited to Switzerland, but authorities here later dropped their investigation into allegations of fraud and falsification of documents. AM