The former Chilean general once routed money through the bank, according to an attorney working with Spanish investigators on Sunday. The settlement is expected to be announced next week.
  
The foundation, based in Spain, will distribute money to go to people who were tortured under the Pinochet government, or to the families of those who disappeared or who were killed, said Sam Buffone, who has worked with attorneys in Spain who represent victims of the Pinochet regime.
  
Bank officials confirmed a court order from Spain's leading anti-terrorism judge, Baltasar Garzon, creating the account.
  
Riggs Bank would pay $8 million, which is covered by a previously established litigation reserve, bank spokesman Mark Hendrix said.
  
Directors Joseph and Robert Allbritton would pay the remaining $1 million, Buffone said.
  
"These are funds that will be provided directly to the victims," Buffone, an attorney with the Washington DC firm Ropes & Gray, said.

"This should send a strong message to financial institutions that if you allow a terrorist to secret funds in banks and to move them around, that's exactly the act we're paying attention to. It sends a strong message to human rights violators that there assets aren't safe anymore." 
  
Suspicious transactions

Riggs Bank pleaded guilty last month to failing to report suspicious transactions and has agreed to pay $41 million in fines to the US government.

The US Justice Department said Riggs courted customers who were a high risk for money laundering and helped them shield their financial transactions from scrutiny.
  
An official Chilean report says 3197 people were killed for political reasons under Pinochet's regime.
  
At least 12 executives, including Robert Allbritton, Riggs' chairman and chief executive officer, could share as much as $15.4 million as part of a big payout following PNC's acquisition of Riggs.