Swiss UBS and American AIG Involved in Brazilian Tax Evasion Scheme

Part of the cash seized by Brazilian police in operation Kasper II After an investigation that lasted one year and a half, the Brazilian federal police unleashed a concerted raid this Tuesday, November 6, using 280 federal agents in three states to break a criminal scheme concocted with the help of Swiss financial institutions to launder Brazilian money and send it overseas.

The plan helped individuals and companies from Brazil to funnel their funds into untraceable bank accounts in Switzerland through a method known as dólar-cabo (cable dollar). 

Operation Kaspar II carried out 21 warrants of arrest and 44 search and seizure orders in the states of São Paulo, Bahia and Amazonas.

Among the 19 people arrested there were partners and executives of big Brazilian companies as well as three officials from foreign banks doing business in Brazil. Among those detained were Swiss banks UBS and Credit Suisse officials as well as an executive of US-based insurance giant AIG.

According to a note from Brazil's Federal Police, the plot was "a criminal scheme whereby banks opened numbered and coded accounts into which Brazilian clients sent money without declaring its origin using the intermediation of doleiros (illegal dollar dealers)." 

Brazilian authorities say that some of those implicated in the plan used doleiros to pay overseas suppliers through a stratagem in which the imported products were under invoiced.

The temporary arrest orders carried out by the Brazilian agents are valid for five days renewable for another five, but those caught by authorities might get up to 40 years in prison if they are condemned for all the crimes they are being charged with.

They are being accused of fraudulent management, tax evasion and embezzlement, money laundering, gang formation and operating a financial institution without authorization from Brazil's Central Bank. The police intend to ask for the preventive prison of some
of those caught.

The Federal police estimate that the money sent to banks in Switzerland and other European countries together with the under invoicing of merchandise bought overseas by Brazilians represents 1 billion Brazilian reais (US$ 570 million) in tax evasion during the last 18 months, the time the investigation lasted.

In the last six months alone, says Ricardo Andrade Saadi, the police chief who coordinated the Kaspar II operation, the scheme was siphoning between 6 million reais (US$ 3.4 million) and 7 million reais (US$ 4 million) out of the country, every month. According to Saadi, the scheme was done in collusion with high officials of the foreign banks involved.

The operation seized 6 million reais and about US$ 600,000 in cash. Bank accounts containing about 2 million reais (US$ 1.1 million) have been blocked by the Brazilian authorities. Kaspar II, was the third police operation focusing on illegal money remittance abroad. The other two were called Operação Suí­ça (Swiss Operation) and Kaspar I.

Brazilian authorities say they cannot name those being probed because the whole legal process is a confidential in camera proceeding. According to unofficial sources, however, Ornare, a luxury furniture factory, Le Postiche, a leather goods company and Gold, a key manufacturer, are among the companies being investigated by the police.


You May Also Like

Built to Break

Brasileiros in daily life complain continuously about shoddy Brazilian-workmanship, and the poor quality of ...

11,000 Brazilians Found in Slave Work in 3 Years

The number of people freed from slave work in Brazil, during the first 10 ...

Arabs Buy Close to Half of the Eggs Brazil Exports, a 400% Jump

Brazilian exports of eggs to the Arab countries grew 423% from January to October ...

Law Students Interested in Human Rights Wanted for Volunteer Work in Brazil

The Robert F. Kennedy Memorial Center for Human Rights and Terra de Direitos are ...

Brazil Approves Purchase of Valtra by AGCO

U.S.-based AGCO Corporation, a global manufacturer and distributor of agricultural equipment, announced today that ...

Federal Judge Says No and American Pilots Cannot Leave Brazil

American pilots Joseph Lepore and Jan Paul Paladino cannot leave Brazil as they had ...

Forecasts for Brazil: 2.5% Growth, 5% Inflation, Dollar at 2.25 Reais

The Brazilian financial market, in its first survey this year, confirmed most of the ...

Like Our Parents

Students and their parents have rock as their first musical choice. Leonardo da Vinci ...

Brazilian Loan to Angola to Be Secured by Oil

The Brazilian government will grant the government of Angola US$ 580 million in credit ...

Brazilians Won’t Need a Visa to Visit the US Anymore

President Bush has signed legislation allowing citizens of 12 more countries, including Brazil, to ...