Two former high officials arrested in Colombia for fraud

BOGOTA -- Colombia's former ambassador to Mexico, Diego Pardo Koppel, and the former president of Banco del Estado, Henry Avila, were arrested in Bogota and charged with making millions of dollars in illegal loans, officials said.

The Attorney General's Office said late Monday that Pardo Koppel, the former mayor of Bogota, had been living in Mexico City even though he had resigned his ambassadorship in March, when he was implicated in the loan scandal. Authorities arrested Pardo while he was visiting his mother in Bogota.

Pardo Koppel and Avila will be held in a temporary facility until authorities find a permanent location.

The Attorney General's Office launched an investigation in May of 15 people accused of receiving illegal loans from Banco del Estado, among them Pardo Koppel and Avila.

The scandal broke in February when authorities discovered that Banco del Estado had made 15 billion pesos (eight million dollars) in unsecured loans. Authorities said that more than half the money would not be recovered.

Pardo Koppel, a close friend of President Andres Pastrana, was named ambassador to Mexico last August, but he resigned in March after being implicated in the scandal.

Pardo Koppel said his family's car distribution business had obtained a 600-million-peso (315,000 dollars) loan, but according to authorities, the debt was exchanged for publicity in an unprofitable television company in which he was a stockholder.

Pardo Koppel resigned as mayor of Bogota in 1986 after he was accused of filing a lawsuit that was detrimental to the state.

Avila was accused of granting loans that did not meet legal requirements