A Chilean court brought formal tax fraud charges against the daughter in law of President Michelle Bachelet in a scandal the leftist leader tearfully admitted was a "painful" ordeal.
The case first came to light a year ago and has shocked the public in Chile, which is ranked by Transparency International as one of the least corrupt countries in Latin America.
The court in the central city of Rancagua banned Natalia Compagnon from leaving the country and ordered her to check in with police each month for a year while judges investigate.
"I want to tell you from the heart that these have been difficult and very painful times for me and my family," a tearful-sounding Bachelet yesterday said after the ruling.
Compagnon is married to Bachelet's son Sebastian Davalos, who previously worked in an unsalaried position in his mother's government.
Compagnon is one of the bosses of a real estate company, Caval, which is being investigated over alleged financial irregularities in the purchase of land.
The court ordered that Compagnon's partner in the company, Mauricio Valero, be held under house arrest for a year.
A total of 13 suspects in the case face charges of influence-peddling, bribery and tax fraud.
Critics had called for Compagnon to be held in prison pending the probe and said yesterday's measures were too lenient.
Compagnon had to be escorted by security forces as she left the court, where an angry crowd yelled: "Thief!"
Bachelet was elected to her current term in 2014 on promises to fight corruption in Chile, the world's biggest copper producer.
She had earlier served as president from 2006 to 2010.
The Caval case has dragged down her popularity rating to a record low of about 20 per cent.
She faces a mid-term test in October when the country holds municipal elections.
"This has clearly upset me deeply and that is a normal human feeling, but that has not for one minute clouded my sense of presidential responsibility," Bachelet said in an address yesterday at the presidential palace.
