KING Felipe's younger sister Cristina de Borbón and her husband Iñaki Urdangarín registered 'fake employees' at the dormant firm they owned together, according to the latter's accountant Antonio Tejeiro.
The most recent of the accused parties to appear in court over the Nóos Institute embezzlement case, Tejeiro claimed Urdangarín and his co-director Diego Torres divided the extra cash they made through inflating invoices for organising sports and arts events.
They billed the regional governments of the Balearic Islands and Valencia for their services, but increased the costs deliberately so they could split the surplus between them – even though the Nóos Institute, through which they organised the events, was registered as a non-profit entity.
This effectively means they were pocketing taxpayers' funds.
Urdangarín and the Infanta Cristina – formerly the Duke and Duchess of Palma before losing their titles as a result of the case – jointly owned the company Aizoon, S.L., purportedly an estate agency but which had no known commercial activity.
Aizoon was allegedly used to launder the extra money earned through the Nóos Institute's inflated bills.
Now, the Institute's accountant says members of the family, and domestic employees including cleaners and housekeepers, were registered as employees of Aizoon and Tejeiro ordered to draw up fake wage slips for them.
Cash laundered through Aizoon is said to have been used by the Infanta for personal expenses and then offset against her tax declarations in 2007 and 2008.
Urdangarín and Torres allegedly agreed to use the former's Royal status to allow him to queue-jump when seeking public works contracts for organising regional government-funded sports and arts events, including a cycling tournament in Valencia.
About €6.2 million was diverted and, according to Tejeiro, divided equally between the two Nóos partners.
Tejeiro told the judge he had been 'given orders' to inflate the earnings of Torres' and Urdangarín's companies.
The trial will continue tomorrow (Monday).
Probably the most keenly-awaited hearing will be on Friday, February 26, when Cristina de Borbón becomes the first Royal in history to stand in the dock on trial for a criminal offence.