Chile’s top prosecutor has filed tax fraud, money laundering and bribery charges against senior former officials and financiers of a rightwing political party created to perpetuate the economic legacy of dictator Augusto Pinochet.

Sabas Chahuán, the national public prosecutor, argued that evidence of widespread bribery of top officials in the mining ministry and millions of dollars in fake contracts was sufficient to request the immediate detention of Carlos Delano and Carlos Eugenio Lavín, both of whom are controllers of the Penta Group, a financial holding company that claims some $30bn in assets.

“What we have here, your honour, is an economic conglomerate with tax evasion as part of its culture,” said prosecutor Carlos Gajardo in his closing statement. “From the highest executive down to the last janitor, everyone submitted fake invoices … The Penta corporation has evolved into a machine to defraud the state.”

Delano and Lavín, long considered political godfathers for the Chilean right, were also accused of funnelling hundreds of thousands of dollars to rightwing political candidates over the past decade.

Delano has worked as a senior adviser for the Independent Democratic Union, a party founded in 1983 by Jaime Guzmán, Pinochet’s speechwriter and political aide.

Guzmán was a key architect of the country’s 1980 constitution, which gave legal protection to Chilean human rights violators – and which the current president, Michelle Bachelet, has pledged to reform.

The Penta Group has funded political campaigns for more than a dozen UDI party candidates.

Chahuán personally took control of the investigation in late February, when prosecutors said they had discovered hundreds more attempts to defraud the government. For the past six weeks, additional charges have been added to the mounting case against Delano, Lavín and several other Penta executives.

In his summary argument on Wednesday, Gajardo said investigators had found more than 1,000 fake documents.

The explosive hearings were carried on live TV and sent a clear message that Chahuán will take a firm stance against corruption.

According to prosecutors presenting the case at Wednesday’s arraignment hearing, Penta executives issued hundreds of fake invoices in the name of their wives, secretaries and children as part of a scheme to avoid taxes and skirt campaign finance laws.

When asked by the Guardian about the allegations, a Penta spokesman declined to comment, but during a break in the arraignment hearing Lavín told reporters that the prosecution’s allegations did not correspond to reality.

“The prosecutor does not know Penta. He created his own novel that doesn’t correspond to reality,” said Lavín in his first public defence of the company he built.

“I believe that I have been a notable businessman, all modesty aside, so to hear this kind of thing is tremendously unfortunate, out of place. He presents us like we were a mafia, as if we were Al Capone or something like that. And is it unfortunate to hear that.” Further arraignment hearings will be held on Thursday.

Chahuán’s decision to ask for pre-trial detention sent a powerful message in a country where even convicted torturers have been confined to prisons with tennis courts, cable TV and tended lawns. Former dictator Augusto Pinochet, who was convicted of plotting the murder of hundreds of his countrymen, was able to avoid jail through endless appeals and political influence he could exert on the Chilean judiciary.

Public pressure to crack down on corruption and influence peddling are at an all-time high in Chile following not only the Penta revelations but also the recent news that Bachelet’s son Sebastián Dávalos stood to benefit from a highly unusual $10m loan to finance a speculative real-estate project. Dávalos has not been charged with any crime but has resigned from the Socialist party.