Royal consort Urdangarin returns to Spain to defend his "honor"

Million-euro "hole" found in Nóos Institute accounts after sports and tourism contracts finalized

Iñaki Urdangarin, husband to Princess Cristina and King Juan Carlos' son-in-law, is back in Spain preparing his defense on allegations that his Nóos Institute profited from public contracts awarded by the Balearic island government.

The Duke of Palma returned to Madrid on Friday from Washington where he lives with the princess and their children.

According to passengers on the United Airlines flight, Urdangarin boarded the plane accompanied by two Spanish security service bodyguards that are assigned to the royal family. However, he traveled alone.

Urdangarin sat in business class but didn't speak to anyone. There was a surge of excitement after some Spanish passengers recognized him. He turned off his iPhone, pulled out a pillow and slept for most of the journey.

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He will reportedly meet with his lawyers in the coming days to prepare his defense.

In a statement released in Washington before he departed, Urdangarin said that he will defend his "honor and innocence" in the ongoing Operation Babel investigation. After a Palma de Mallorca judge lifts the secrecy of the case and the details are known, Urdangarin said that will issue a statement about the case.

Urdangarin allegedly made profits of 170 percent over the real costs of the sports and tourism events his Nóos Institute organized for the Balearic government in Palma de Mallorca between 2004 and 2006.

The events were paid for by regional authorities and sponsors to the tune of over 1.1 million euros for a two-day session. Investigators believe the real costs were closer to half a million euros, and that the Nóos Institute - theoretically a non-profit group - deliberately overcharged on its invoices and later channeled that money to companies controlled by Urdangarin and his associate Diego Torres, who is already answering charges of misappropriation of public funds.

Urdangarin, a former Olympic handball champion who met Doña Cristina at the Atlanta Games, founded several business ventures after retiring from sports, including a real estate firm called Aizoon whose ownership he shares with his wife, Cristina de Borbón. The investigation shows that Aizoon received at least 275,000 euros through Nóos during one of the Palma events.

Besides many suspect invoices - the Anticorruption Attorney's Office suspects many are phony or artificially high, and that Nóos "set prices that were completely disproportionate to the services it rendered" - investigators also found a hole in the accounts for one million euros. This is the basis for the criminal charges of misappropriation of public funds.

In the course of five years, Nóos Institute had a turnover of 10 million euros, the accounts show. One firm connected to Nóos was also found to have transferred nearly half a million euros to a company headquartered in a tax haven.

Offices searched

After a months-long investigation, the anticorruption attorney, Pedro Horrach, worked for three days on the searches of Nóos' offices in Barcelona and the interrogation of Urdangarin's business partner Torres, as well as three business administrators.

The Nóos Institute was allegedly also handed hefty public contracts in the Valencian region under Popular Party premier Francisco Camps, who eventually stepped down and is also being investigated on corruption charges in the wide-ranging Gúrtel kickbacks-for- contracts affair.

So far, the Royal House has not made any public statements but said it wants all relevant legal action to be pursued and that it will keep abreast of developments.

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