Brazil’s CB Freezes R$47 Million in Assets from Lava Jato Scheme

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The Central Bank of Brazil announced Thursday, November 20th, it has frozen more than R$47 million in assets from individuals and companies arrested last week in the Lava Jato (Carwash) money-laundering scheme involving Brazil’s oil giant, Petrobras. The measure had been requested by Federal Judge Sergio Moro.

According to Central Bank officials, the frozen assets are from accounts of fourteen employees and high executives who were arrested by the federal police on Friday, November 14th, as well three of the companies accused of giving money to Petrobras officials for contract benefits. The accounts of two other suspects involved in the illegal operations showed a zero balance.

The Lava Jato operation, conducted by Brazil’s federal police, made its first arrest in March, after federal investigators uncovered links between former Petrobras director for refining, Paulo Roberto Costa and Alberto Youssef, a black-market money dealer.

Both Costa and Youssef made agreements with prosecutors for lenient sentences and implicated other Petrobras officials and high executives from some of the largest engineering and construction companies in the country, in the scheme. Morgan Stanley told its clients, according to a Reuters report, that the scheme may have led to over R$21 billion exchanging hands.

Due to the ongoing investigation and the volume now said have been illegally obtained by directors and managers at Petrobras, the company delayed releasing its third-quarter financial results last week.

According to Petrobras President, Maria das Graças Foster, the company will have deduct the millions of dollars stashed away by former employees from its final accounting report. Petrobras officials have said that they would probably release the report at the beginning of December.