Taipei  - Taiwan's former security chief admitted Tuesday to giving former president Chen Shui-bian two sensitive documents concerning alleged money-laundering implicating Chen's family.

"I felt pained in the past 20 days over the case and I believe honesty is the best policy, so I decided to tell the truth," Yeh Sheng-mao told a hastily called news conference in Taipei.

Yeh, who was indicted on Thursday for covering up the snowballing money-laundering scandal, said he received a report from international investigators on January 29 saying Chen's family was suspected of laundering money through bank accounts set up by his son and daughter-in-law in the Cayman Islands.

He said he reported the case to Prosecutor-General Chen Tsung-ming in early February and the prosecutor-general asked him to continue to investigate the case. Shortly afterward, Yeh said he handed the document to then-president Chen Shui-bian.

Yeh also admitted that he handed a similar document to the president in 2006 and Chen said he would handle the matter himself.

On August 14 when a ruling Nationalist Party or Kuomintang (KMT) lawmaker revealed a copy of a document concerning the alleged money laundering, Yeh said he telephoned Chen Shui-bian and asked him about the January 29 document. He said Chen told him he was unable to locate it.

Yeh apologized to the public and said he was willing to face any legal actions that may be taken against him.

Prosecutors were seeking a two-and-a-half-year jail sentence against Yeh for concealing the document that hampered investigations into the alleged money-laundering scandal.

Prosecutors found proof of Yeh's alleged coverup after finding copies of the document during a search of his home on August 21.

Chen Shui-bian denied concealing the two sensitive reports, saying there were no requirements for official actions from him since they were not sent to him "officially."

The scandal surfaced in early July when Swiss judicial authorities officially alerted Taiwan of suspected money laundering after detecting unusual fund transfers in accounts set up by Swiss banks in the Cayman Islands for former president Chen's son, Chen Chih-chung, and daughter-in-law, Huang Jui-ching.

It took nearly one month before Taiwan's envoy to Switzerland, who was appointed by Chen, sent the alert to Taiwan's Foreign Ministry, which transferred the case to the Justice Ministry on July 31 for investigation.

The scandal was first revealed by a Taiwan magazine on August 10. On August 14, Chen admitted that his wife Wu Shu-chen had remitted 21 million US dollars, in campaign funds from the 2000 and 2004 presidential elections that Chen had not declared, into several foreign bank accounts.

But he insisted that the funds were not laundered money, and prosecutors later discovered that Wu had asked her brother, Wu Ching-mao, son and daughter-in-law to set up overseas bank accounts for her to wire the money to.

Prosecutors have questioned Chen, his wife, brother-in-law, son and daughter-in-law over their roles in the scandal and barred them from leaving Taiwan, pending further questioning.

Taiwan has also acquired legal assistance from Switzerland and Singapore, where Wu allegedly wired the money.

Chen stepped down as president in May after serving two four-year terms from 2008. He was succeeded by Ma Ying-jeou of the KMT. (dpa)