Paul Schaefer, founder of the a secretive German enclave in southern Chile called Colonia Dignidad, or Dignity Colony, fled Chile in 1997.

For more than seven years he had been a fugitive; that ended when he was arrested by Argentine Interpol officers in a suburb or Buenos Aires on March 10. He was then deported to Chile.

According to witnesses inside the Chilean courtroom where he appeared March 14, Schaefer, 83, appeared dazed and confused. He barely spoke during the court proceedings.

Schaefer was a corporal in the German army during World War II. In the 1950s he founded a religious sect but was accused of child abuse. He fled Germany for Belgium and then Chile.

In 1961, living in Chile, Schaefer founded Colonia Dignidad. The group, some 500 people, mostly of them German or Chilean, lived on a 40,000-acre compound about 250 miles south of Chile’s capital, Santiago.

The community created an impenetrable security system., with cameras at its gates and a wall encircling the enclave. Members also built a series of underground bunkers and tunnels. It is thought that Schaefer escaped through one of the tunnels that allegedly extends to nearby Argentine territory. It is believed as well that the same tunnel allowed a number of Nazis thought to have lived in southern Argentine and Chile to have escape in both directions.

The community grew to be an economic powerhouse, with food manufacturing, tourism and mining operations, and it developed close ties with both regional and national police forces, politicians, and the military and judicial establishments. Its businesses were so large that one Chilean government official claimed that Colonia Dignidad owes more than $5 million in back taxes.

In the late 1960s a few people began to escape from the heavily guarded compound, bringing with them charges of pedophilia and virtual enslavement of the community’s young members through the sophisticated use of drugs. No action was taken against the group, though.

During the military dictatorship of Gen. Augusto Pinochet, from 1973 to 1988, the colony was used as a torture center, according to testimony given to the Rettig Commission, which investigated military atrocities in the early 1990s. A number of “disappeared” persons were seen last in the barracks at Colonia Dignidad.

According to the commission’s report, “It is imperative for the Commission to examine and make known its conclusions with respect to the charges that have been made against Colonia Dignidad. Through some kind of agreement with the DINA” — the Chilean secret police — “and the leaders of that place, political prisoners were held and tortured there. It is particularly important to investigate the charges that Colonia Dignidad had been the last place where many of these prisoners — today disappeared — were last seen alive.”

Yet Schaefer maintained his power until 1997, when the charges of child abuse forced him to flee the country.

“We want to congratulate the Argentine government and the local Interpol authorities for capturing this dangerous man,” said Sergio Widder, director of the Simon Wiesenthal Center’s South American office.

“We also thank the Argentine government and Interior Minister Anibal Fernandez for quickly expelling Schaefer so he can go on trial in Chile.”

“This is a great opportunity, given that Walter Rauff lived for many years in Chile, much of that time under the protection of Pinochet, and Rauff had contacts with Colonia Dignidad,” Widder said. “We have an opportunity to interrogate Schaefer about Rauff. It is also possible that with the information that he gives in his depositions we might get information on other Nazi war criminals still alive and living in Chile.”

Rauff was a Nazi war criminal who escaped to Chile after the war and lived a protected life there until he died in 1984. Rauff, considered the developer of the mobile gas chamber, was buried in the Santiago’s central cemetery as mourners hailed him with the Nazi salute.

Pascale Bonnefoy, a freelance journalist who has written extensively about Colonia Dignidad and Paul Schaefer, is not sure that the Nazi issue will be raised.

“It seems no one is expecting Schaefer to actually say anything, provide any useful information,” Bonnefoy said. “But what is increasingly clear is that the new Colonia leadership and some colony members may be more willing to talk, in part because of a change in image, in part because they may feel safer now to talk.

“It is such an emblematic case, a ‘monument to impunity,’ as one Chilean government spokesman described Schaefer,” Bonnefoy continued. “There is such public attention and pressure for Schaefer to be tried quickly and effectively. However, there is some fear that Schaefer will look to square old accounts with his buddies in powerful positions. He has so much information on everyone, I am sure there are a lot of people trembling out there.”

Olga Weisfeiler’s brother Boris, a Russian Jewish emigre mathematics professor at Princeton and Penn State University, disappeared in 1984 while hiking near Colonia Dignidad. She agrees that Schaefer will not talk but hopes that the code of silence will be lifted.

“I don’t expect that Schaefer will say anything about Boris or about anything at all, but others may,” she said. “After Schaefer’s arrest, Colonia’s new leader right away publicly admitted that human rights abuses were committed on Colonia’s grounds, so it may be very possible they will tell the truth about Boris’ fate as well as of the other prisoners.”

Weisfeiler is the only U.S. citizen whose disappearance during the dictatorship in Chile remains unsolved. State Department documents released in the last few years show that Weisfeiler was seen inside the colony, living in slave-like conditions, two years after his disappearance, according to a Chilean former intelligence officer who gave testimony to U.S. Embassy officials.