Ex-partner of princess' husband links palace to fraud case

Spain's Princess Cristina arrives at a makeshift courtroom for a corruption trial, in Palma de Mallorca, Spain on Monday, Jan. 11, 2016. (AP / Emilio Morenatti)

MADRID -- A key defendant in the tax and embezzlement trial involving Princess Cristina testified on Tuesday that a Royal Palace lawyer oversaw the activities of the company he and the princess' husband ran and which prosecutors say was used to swindle millions in public funds.

Diego Torres said the non-profit Noos Institute he set up with fellow accused Inaki Urdangarin presented its accounts for periodic approval to Jose Manuel Romero, a lawyer for former King Juan Carlos, and to tax inspectors.

With such a double level of control, Torres said he had no reason to suspect anything was illegal. Accusations that the company used the princess as a "tax shield" were false, he said.

Romero, who is not on trial, has denied similar accusations by Torres in the past.

Prosecutors in the trial for fraud and embezzlement are seeking a near 17-sentence for Torres, one of 18 accused in the case.

His testimony, which is expected to last several days, is to be followed by that of Urdangarin, who faces a possible sentence of 20 years.

Urdangarin allegedly used his former title of Duke of Palma to embezzle about 6 million euros ($6.6 million) in public contracts for sporting events through the institute between 2004-2006. Among the side companies that allegedly benefited was Aizoon, a property consultancy firm he owned with Cristina.

Cristina, charged with two counts of tax fraud and facing a possible eight-year sentence, has denied knowledge of her husband's business activities. She is the last to testify.

The couple allegedly bankrolled a lavish lifestyle with Aizoon funds.

The princess, sister of King Felipe VI, is the first member of the royal family to face criminal charges since the monarchy was restored in 1975.