Money Laundering Scheme in Brazil Indicts Twelve Executives

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The Federal Police in Brazil has indicted twelve executives from four construction giants being investigated in the Petrobras money laundering scandal. According to the government agency, a lobbyist for some of these companies has also been indicted.

The indictments are the latest in a series of actions taken by the Federal Police and the Public Prosecutors Office in Operação Lava Jato (Operation Carwash), which revealed a money laundering scheme implicating some of Brazil’s major construction and engineering firms and state-controlled oil giant Petrobras.

Among those indicted on Monday, December 8th, is the president of OAS Construtora, the executive vice president of Mendes Junior, and the former president of Queiroz Galvão. The federal police indicted the executives on five counts, including fraudulent biddings, money laundering and active corruption. For those crimes the Brazilian law calls for a maximum sentence of 31 years in jail and a fine.

According to authorities the Lava Jato scheme is said to have illegally moved nearly R$10 billion, between construction companies, engineering firms and Petrobras executives. The nine companies being investigated by the police are said to have close to R$59 billion in contracts with Petrobras, but only part of these are being investigated by authorities as being illegal transactions.

The Lava Jato operation, conducted by Brazil’s federal police, was announced in March of 2014 with the arrest of former Petrobras director for refining, Paulo Roberto Costa. Costa made a deal with prosecutors for a more lenient sentence and implicated other Petrobras officials and high executives from some of the largest engineering and construction companies in the country in the scheme.