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Brazzil - Money - August 2004

Brazil's Doleiros: A Breed in Extinction?

Brazil's Federal Police are in the midst of a national crackdown on
, illegal money changers and sometimes trusted personal
bankers. According to police, the doleiros received dirty money in
Brazil and sent it abroad. Part of this money returned to Brazil
as investments after going through off-shore tax shelters,

Daisy Nascimento


Picture Brazil's Federal Police (PF) have already arrested 73 doleiros (money-changers) and businessmen charged with involvement in an international money-laundering scheme. One hundred and five arrest warrants were served during the Beacon Hill Operation, carried out simultaneously in eight Brazilian states.

Investigations into the scheme began in 1997, based on suspected irregularities in the use of bank accounts. Commissioner Paulo Roberto Falcão, in charge of the operation in Rio de Janeiro, presented a tally covering the first phase of the effort, which got underway on August 17.

According to him, 60 firms connected with the Beacon Hill Service Corporation, which is responsible for managing the foreign accounts of various Brazilian money-changers and is one of the chief beneficiaries of the scheme, handled approximately US$ 20 billion between 1997 and 2002.

Forty companies, formed exclusively by Brazilians, are already being investigated by the police. The police are now trying to identify the money-changers' clients who might have been involved in corruption, tax evasion, and smuggling, among other crimes.

The PF wants to gather sufficient documentary evidence to pass along to the Public Interest Defense Ministry, which can request preventive detention for the individuals concerned.

According to the PF, the doleiros received dirty money in Brazil and sent it abroad. After passing through various accounts, including off-shore tax shelters, part of this money returned to Brazil in the form of payments or investments.

War on Money-laundering

Earlier this month, the Minister of Control and Transparency, Waldir Pires, said that the third meeting of the Integrated Management Cabinet to Prevent and Combat Money-Laundering served to develop proposals that will equip the democratic State to overcome organized crime and money-laundering in the Brazil.

"This will help in the construction of a decent society, with measures to preserve individual and constitutional rights in order to arrive at a more just society," Pires remarked.

According to Pires, money-laundering, illegal gains, and organized crime have grown considerably in the country, and the activities to combat these crimes must be disciplined. "The actions of the State have to be competent and efficient to reassure Brazilian society," he affirmed.

The government's strategy to prevent and combat money-laundering in the country was formulated at the end of last year. The objective was to establish a new system for the repression of this type of crime, with the participation of organs from the Executive, the Public Interest Defense Ministry, and the Federal Accounting Court.

The Brazilian Ministry of Justice's strategy to combat organized crime and money laundering involves unifying the activities of the executive and judicial branches and the public interest defenders' office.

The National secretary of Justice, Cláudia Chagas, said that the "goal is to establish a wide network so that the crime of money-laundering can be fought more effectively."

According to her, Brazil has a good law to combat money-laundering, but the institutions to enforce it are not very effective. "What we are putting together is an organization of these institutions for the sake of greater agility and competence," she affirmed.

The director-general of the Federal Police, Paulo Lacerda, said that, despite the jurisdiction of each government agency, the idea is to integrate actions to combat money-laundering, to avoid a dispersion of efforts.

Daisy Nascimento works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.
Translated from the Portuguese by David Silberstein.

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