Linares Faces Over $1.2 Million in Questionable Invoices Amidst Fraud Allegations from Audit Office

Original article: Linares enfrenta más de $1.200 millones en facturas irregulares y Contraloría advierte posible fraude

The Municipality of Linares is grappling with multiple lawsuits related to over 49 questionable invoices that total more than $1.2 million. These invoices were issued without adequate backing for actual services, with several showing duplications or inconsistencies, and subsequently transferred to factoring companies, which have gone to court to collect the amounts despite the municipality’s claims of no record for the services rendered.

The irregularities came to light after social worker Paulina Álvarez made a formal request to the Regional Audit Office of Maule to investigate potential misconduct within the municipality.

The municipality contended that it had no evidence suggesting that the services had been requested or performed, raising the possibility that many of the invoices may be ideologically false.

Additionally, it was revealed that the municipality failed to lodge a complaint within the eight-day legal timeframe following receipt of the invoices. Legally, failing to dispute these invoices within that period presumes the services were rendered, complicating the municipality’s defense.

Considering all lawsuits and involved invoices, the municipality could end up owing around $1.369 million, without proof that any services were actually provided.

The Audit Office identified a potential systematic fraud, demanding the municipality to finalize the internal inquiry, recover funds, investigate accountability, and enhance the internal control system within 15 to 60 days.

Álvarez stated that although there were administrative inquiries within the municipality, they had made little progress over time. She noted that this situation could result in significant fiscal harm and serious administrative disarray.

Moreover, she urged the Audit Office to conduct an urgent audit of the invoice acceptance and payment processes. She also requested determination of administrative responsibilities and any potential breaches of ethics.

Further, she called for investigations into possible crimes or irregularities, evaluation of whether to report to the Public Ministry, and a review of the municipality’s internal controls to prevent similar incidents in the future.

Criticism of the Municipal Response: Was Slow and Insufficient

In an interview with El Ciudadano, Paulina Álvarez expressed her decision to file the complaint was driven by the discovery of various irregularities during the current municipal administration, some of which were already in formal processes with the Regional Electoral Tribunal and the Prosecutor’s Office, including involvement from the State Defense Council, similar to the Chlorine case during the pandemic.

In that context, she noted her particular concern over a new incident where the municipality was being sued in civil courts for invoices financed through factoring for substantial amounts, which the municipality itself acknowledged not recognizing—some without purchase orders, others duplicated, and several judicially claimed—prompting her to consider the complaint indispensable.

«I reviewed the civil cases of the executive charges, gathered all information, and submitted everything to the Audit Office for a thorough investigation into this new case that once again impacts Linares,» she stated. 

Álvarez claimed she did not face formal or direct pressures; however, during her recent independent candidacy campaign supported by Acción Humanista, she confronted systematic harassment on social media. 

She reported receiving attacks and disparaging remarks from individuals directly or indirectly linked to the municipality, who used her appearance and political ideas to discredit her, even through coordinated accounts.

Regarding the municipal response, she stated:

«The municipality’s reaction has been slow and insufficient. The Audit Office had to send them an email reprimanding them for the unjustified delay in the administrative inquiry. In a case of such magnitude and severity, the bare minimum would have been to act with urgency and responsibility, but that did not happen. This lack of timely response only generated more doubts about how the situation was being handled and reinforced the necessity for direct interference from the Audit Office.» 

On her expectations from the investigation, Álvarez said: «I hope the investigation progresses thoroughly within a reasonable timeframe, that all individuals involved are formalized, and that no one escapes accountability. To my mind, there is a mechanism of defraudation that operated from within the municipality, a system that functioned for quite some time that eventually spiraled out of control.»

She also noted indications of a sustained practice involving the issuance of false invoices with internal participation. She claimed that, unable to continue justifying them, these invoices would have been denied and subsequently factored for collection, a situation that she believes warrants an in-depth investigation.

She urged the Public Ministry, the Internal Revenue Service, and the State Defense Council to act swiftly for the accountable to answer before justice and the community. Moreover, she warned against repeating the circumstances of the Chlorine case, where the court extended investigation deadlines despite sufficient evidence.

«This constant prolongation raises profound doubts about the functioning of justice here in Linares. Citizens wonder how many more years they must wait for concrete answers on matters directly affecting public resource usage. That same uncertainty is troubling when new events arise, like these ideologically false invoices,» she concluded.

Audit Office Findings: Invoices Over $1.3 Million Under Scrutiny

The Audit Office found multiple dubious invoices, determining that various companies and individuals had issued documents to the municipality that collectively summed to over $1.3 million.

Additionally, many of these invoices lacked purchase orders, had non-existent orders, were associated with previously paid orders, or corresponded to vague or generic services, making verification of their actual performance difficult.

Meanwhile, municipal departments such as the Administration and Finance Directorate, Municipal Education, and Municipal Health did not identify the invoices within the legal timeframe, allowing companies to legally claim them.

The municipality reported these false invoices at different dates in 2024 and 2025, leading to their consolidation into a major criminal investigation. The municipality also filed a complaint for document forgery, malicious use of instruments, fraud, and other offenses.

The Audit Office confirmed that the municipality indeed opened an administrative inquiry on August 22, 2024, with attorney Sergio Corvalán as the prosecutor of the process. However, the agency criticized that the inquiry had taken too long without advances.

For this reason, the Audit Office compelled the municipality to expedite and conclude the administrative inquiry as soon as possible and report the findings once it ended.

Furthermore, the agency is conducting its own special investigation, independent of the administrative inquiry, stating that once completed, it will publish the Final Report on its website.

The Audit Office’s investigation remains ongoing, and its results are expected to be published in the coming weeks. In the meantime, the municipality must conclude the pending inquiry and address the internal control failures that allowed the invoices to be deemed accepted.

With several executive lawsuits progressing in the courts, the financial risk for Linares continues to grow. The audit will determine whether these were administrative errors, negligence, or organized fraud within the municipality.