I’ve been writing for the FCPA Blog about corruption, compliance, and enforcement in Latin America. The prior post covered some enforcement actions and pending investigations in Brazil during the second calendar quarter.
In this post, I’ll continue the focus on Brazil, with a look at some major scandals that have political implications.
Insistência operation: At the request of the Federal Prosecution Service (MPF) in São Paulo, a court ordered the seizure of assets of 23 people involved in an alleged corruption scheme that operated out of the Bureau for Treasury Crimes Repression (Delefaz), an agency linked to the Federal Police in São Paulo. Two chief police officers and nine agents of the Federal Police, plus eight traders, an outsourced former employee, and three lawyers face six charges charges of administrative misconduct. The seizure of assets totaled BRL 18 million ($5.6 million).
Zealots operation: The Brazilian Senate has approved the creation of a commission to investigate a tax-dodging scheme. For 15 years, lobbying firms, consultants, and lawyers allegedly bribed members of the CARF (Administrative Council for Tax Appeals – an internal court of the Brazilian IRS) to help companies evade taxes.
Carwash operation: The Federal Prosecution Service won six decisions in court allowing the seizure of more than BRL 1 billion (more than $300 million) in assets from six companies involved in the Petrobras bribery and kickback scandal. Thirteen individuals, among them three former congressmen, have been charged with corruption, money laundering, and embezzlement. The MPF also charged a financial operator and his wife for obstructing the investigation. Nestor Cerveró, Petrobras’s former director of international operations, was sentenced to five years in prison.
Mensalão scandal: Alberto Youssef, one of the alleged money launders named in the Petrobras scandal, Oily, was sentenced to five years in prison for committing the same crime in the Mensalão scheme.
Victoria operation: The Coaf (an intelligence agency linked to the Finance Ministry) identified financial transactions during the past three years possibly involving money laundering totaling BRL 3 billion ($944 million). The criminal network used front companies for the illegal import of goods from Venezuela. It inflated the cost of the goods by up to 5,000 percent and allegedly received remittances from Venezuela for the inflated amounts. Some of the money was used to make fraudulent loans. According to the Federal Police, the foreign currency evasion and money laundering also involved the UK, Venezuela, and the U.S.
Former president Lula under investigation: The Epoca magazine said, “The Federal Police also found that one of the companies involved in the Carwash operation transferred resources to a company and to an institute of the former president.”
In the next post, I’ll talk about some reform actions already taken by Brazil’s federal government and one of the states.
Lucas Zanoni is an undergraduate student of law at University of São Paulo and a legal intern in the compliance and anti-bribery team of Chediak Advogados. The firm offers legal assistance for both Brazilian and international clients across different industries and business sectors.