Prosecutors in Germany say they have dropped their investigation into Hartmut Hopp, who worked as a doctor in a notorious commune in southern Chile.
Hopp was the right-hand man of Paul Schäfer, a former Nazi soldier who founded Colonia Dignidad in 1961.
A court in Chile found Hopp guilty of complicity in child sex abuse committed by Schäfer but the doctor fled to Germany before he could be jailed.
German prosecutors say the evidence was not enough to uphold the ruling.
Hopp's lawyer said that his client was "disgusted by the cruelties committed in Colonia Dignidad" but that he had never suspected that they were taking place.
Colonia Dignidad was a commune set up by Paul Schäfer in the remote Maule area about 350km (220 miles) south of the Chilean capital, Santiago.
Schäfer ran the commune as a secretive cult with members living as virtual slaves and prevented from leaving by armed guards with dogs.
At its height, 300 Germans and Chileans were living in the 137 sq km (53 sq mile) compound surrounded by wire fencing and overlooked by a watchtower with searchlights.
Children were forced to live separately from their parents and dozens were sexually abused by Schäfer.
A former officer in the Wehrmacht, the German army during World War Two, Schäfer became a lay preacher in post-war Germany where he worked with at-risk children. He left Germany in 1961 after allegations of sexually abusing children were levelled against him.
He moved to southern Chile with a group of his followers and established Colonia Dignidad as a highly authoritarian agricultural commune with himself as the leader.
To the outside world, Schäfer portrayed the colony as a harmonious group dedicated to farm work and providing free healthcare and education to the surrounding villagers.
But reports of abuse, torture and abductions began to emerge as early as 1966 when one of the commune's young members managed to flee to Germany.
The young man told police how he had been taken to Chile by Schäfer and his group, forced to work long hours building the commune and had to endure savage beatings and sexual abuse as well as being drugged after his first two failed escape attempts.
It was not just members of Schäfer's sect who suffered abuse at the colony.
Under the military rule of Gen Augusto Pinochet, Colonia Dignidad became a clandestine detention centre. About 300 opponents of the regime were interrogated and tortured in its underground tunnels both by members of the Chilean secret police and Schäfer's associates.
At least 100 people are thought to have been murdered at Colonia Dignidad. One of those believed to have been killed at the site is US academic Boris Weisfeiler, who went hiking in Chile in 1984.
Hopp, who is 74, ran the clinic within Colinia Dignidad. Hopp, who had moved to Chile with Schäfer in 1961, was one of the very few members of the colony who was allowed to leave the compound to go abroad and study.
In the 1980s he became the right-hand man of Paul Schäfer, acting as a spokesman for the colony. He was convicted by a Chilean court of complicity in the rapes and sexual abuse committed by Schäfer.
He fled Chile for Germany before the sentencing. A German court upheld the Chilean ruling in 2017 and sentenced Hopp to five years in prison but the ruling was overturned by a higher court in September 2018.
The court said at the time that it had found no concrete evidence that Hopp had actively aided and abetted the abuses committed by Schäfer.
However an investigation by German prosecutors continued. That investigation has now been dropped with prosecutors saying that "after exhausting all promising investigative leads, it was not possible to substantiate a sufficient suspicion under any legal aspect necessary for an indictment".
Schäfer fled Chile in 1997 while facing a number of lawsuits over the sexual abuse of children at Colonia Dignidad. He was arrested in Argentina in 2005 and sent to jail in Chile to serve a 20-year sentence.
He died in prison aged 88 in 2010.
Colonia Dignidad changed its name to Villa Baviera in 1991 and has become a tourist resort with a German-themed restaurant and hotel. More than 100 people, many of them former members of Colonia Dignidad live at the site with many saying it is the only home they have ever known.
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