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Brazil police arrest construction titan in Petrobras fallout

Marcelo Odebrecht (Image courtesy of the Economist via YouTube)Brazilian police arrested Marcelo Odebrecht, the billionaire CEO of the powerful Odebrecht conglomerate.

He was arrested last week with three other senior company executives and the chief executive of Andrade Gutierrez, another huge construction company.

The arrests are part of a federal investigation into a billion-dollar overbilling and kickback scheme between contractors and officials from state-owned oil giant Petrobras.

“We have material proof that they knew about the practice of overbilling contracts with Petrobras and they participated directly in the division of contracts within the cartel,” Igor Romário de Paula, a police investigator, said Friday.

Odebrecht and Andrade Gutierrez issued statements denying any wrongdoing.

Odebrecht does business in 21 countries and had over $35 billion in revenue last year, the New York Times said. It operates in infrastructure, petrochemicals, real estate, agribusiness, and military contracting.

The Petrobras scandal has landed several Petrobras employees in jail and forced former CEO Maria das Graças Silva Foster to resign in February.

Prosecutors have named 54 political figures suspected of being involved in the graft scheme.

In May, Petrobras filed lawsuits against engineering and construction firms to recover about $424 million allegedly tied to corruption. Among the defendants are Engevix and Mendes Júnior, Camargo Corrêa, OAS, and Galvão Engenharia.

The suits didn’t name Odebrecht and Andrade Gutierrez.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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