Tales of German submarines unloading gold bricks off Patagonia as World War II ended are a legacy of Argentina's murky ties with the Third Reich, stories that survive in the public imagination even though they are more fable than fact.

The real story of Nazi loot in Argentina, it turns out, may be more mundane. Documents from the U.S. National Archives released this week by the World Jewish Congress show that U.S. and British diplomats suspected that the Third Reich moved money here, not with cloak-and-dagger military operations, but mainly through conventional gold and currency transfers managed by bankers in Buenos Aires and Europe.

According to the documents, diplomats believed that middlemen in Argentina standing in for the real buyers, presumably ranking members of the Reich, in all likelihood bought ranches, took over industries or invested in the hundreds of front companies that Jewish leaders here say were created to funnel an estimated $1 billion in Nazi money.

Investigation of the Argentine connection is part of a broader probe into what happened to the assets of Jews entrusted to Swiss banks before and during the war. An estimated $6 billion or $7 billion worth of gold was deposited in Swiss banks, and documents in the National Archives have convinced researchers that Argentina "was one of the central places through which the Nazis laundered gold," said Elan Steinberg, the executive director of the World Jewish Congress.

Rumors that Nazis invested heavily in Argentina began circulating long before the war ended, according to the documents. A memo from the British Embassy in Washington in 1941 noted that Latin America was becoming a tempting place for Nazi assets even before the United States entered the war. Cables from the U.S. Embassy here speculated over who was investing where, what companies were owned by Nazis and who their agents in Argentina were.

While not conclusive on their own, particularly concerning individuals alleged to be involved, the documents are being taken by Jewish leaders as convincing evidence.

"The notion that the Nazis moved assets into Argentina is not new, but for the first time we have authoritative documentation," said Steinberg.

The disclosures by the World Jewish Congress are just the latest to confirm Argentina's ties with the Third Reich, yet another embarrassment for a country that only recently acknowledged this dark chapter and agreed to search its own archives for evidence of complicity. A special team organized by the Jewish community here has spent months searching files, and Jewish leaders have stated that they now have evidence that the Argentine government had a much more direct role than previously recognized in the relocation and protection of Nazis who moved here after the war.

Ruben Beraja, the leader of the Argentine Jewish community and a vice president of the World Jewish Congress, said the documents unearthed from the archives here prove that the Argentine government received the arrest order for Nazi physician Josef Mengele in 1956 and waited three years before executing it.

By then, one of the most sought-after Nazis had vanished, apparently moving to Paraguay and then Brazil, where he died in 1979. "This shows that there was a group, in the justice system and in the police, that in some way extended protection to these Nazis," Beraja said.

The relationship between the Third Reich hierarchy and Argentine leaders at the time, in particular President Juan Domingo Peron, has long been the subject of speculation. The apparent extent of the Nazi investments here gives more weight to the argument that there was an ideological and financial affinity between the two nations.

All of this is a backdrop for the information contained in the documents from the U.S. Archives. A collection of rumors and learned speculation, the cables are part of what was known as Operation Safehaven, the U.S. effort to track the movement of Nazi assets.

One document from August 1944, for example, cites a confidential source telling the U.S. Embassy in Spain about an offer to launder German funds by trading $20 million in Swiss francs for gold located in Buenos Aires. Another, dated April 1945, estimates German assets in Argentina at more than $1 billion, with most of the money invested in farms and ranches, banks and commercial firms.

Although often accompanied with a caveat, such as "this information has not been confirmed," the memos provide the names of German-Argentines and others who allegedly acted as brokers or front men for Nazi leaders, including Hermann Goering, Paul Joseph Goebbels, Heinrich Himmler and others.

One of the more interesting names to surface is that of Fritz Mandl, an Austrian who made a fortune as an arms trader and settled in Buenos Aires before the war. One report from the U.S. Embassy in Buenos Aires, dated March 14, 1945, and titled Safehaven Report No. 3, reports that "a source which from time to time is reliable" alleged that Mandl was receiving money from Goering, Himmler and Goebbels and was investing it with the full knowledge of Argentine officials. The fact that the documents contain names startled people here. Argentina's large and prominent German community grew by 45,000 after the war ended, and relatives and friends of those named reacted incredulously when informed. Roberto Aleman, a former economy minister and ambassador to Washington, questioned the accuracy of the reports, particularly in cases where they named people he knew, like Mandl, on the basis of what he called hearsay.

Raul Guillermo Decker, until recently the minister of mining, could not believe it when told that the British suspected his father of being an agent for "German money seeking refuge in Argentina." The information is included in a Dec. 22, 1944, confidential memorandum, a three-page report titled "Foreign Funds Control: List of Reports of Axis Accounts and Investments in Argentina." "There must be some confusion. I can't understand how they reach that conclusion. I don't know why all this has to come out so many years later, muddling the political scene," said Decker, referring to Argentina's new and more prominent role in Latin America. "What are the reasons behind this?"