Brazil’s Latest Fraud Case Involves US$ 2.5 billion and World’s Largest Beef Exporter

Brazilian federal police Brazilian police launched the so-called Greenfield Operation, an investigation of fraud at state-run companies’ pension funds, as a judge ordered dozens of senior financiers and executives away from their firms, including the chief executive of JBS, the world’s biggest beef exporter.

Police carried out five arrests, more than two dozen interrogations and over 100 search warrants, seizing jewels, luxury vehicles, artwork and an airplane in an asset freeze to cover up to 8 billion reais (US$ 2.5 billion) in alleged damages.

The federal judge overseeing the case, Vallisney de Souza Oliveira, ordered the chief executive of meat packer JBS SA and 39 others under investigation to suspend their corporate roles, avoid all capital market activity and forfeit their passports in order to avoid jail.

JBS shares fell 10%, the biggest drop in six months, at the prospect of billionaire brothers Wesley and Joesley Batista, who run JBS and their family’s holding company J&F Investimentos, respectively, from serving at the group’s firms.

Brazilian federal police

The probe of the pension funds is the latest in a string of investigations into corruption at the vast overlap of Brazilian business and politics, rattling Latin America’s largest economy and feeding political instability.

The four pension funds under investigation, which controlled about 280 billion reais in assets last year, have been an important source of investment in Brazil’s credit-starved economy, but political connections at the state-run firms have raised questions about influence in their decisions.

The pension funds caught up in Monday’s investigation are those of state-run banks Caixa Econômica Federal and Banco do Brasil, postal service Correios and oil giant Petrobras, which has been ground zero of the graft investigations roiling the nation.

Yet police said their investigation focused on losses to pensioners from reckless or fraudulent investments throughout the Brazilian economy.

Other executives affected by the judge’s order include the chief executive of wood pulp maker Eldorado Brasil Celulose SA, also controlled by the Batista family, José Carlos Grubisich; and Denise Pavarina, the head of the asset management unit at lender Banco Bradesco SA.

Press representatives for J&F and Eldorado said their executives were collaborating with the investigation. JBS referred comment to J&F.

Bradesco said its asset management units “follow the regulations in funds under management and rules by regulators” and that the bank is cooperating with authorities.

Pension funds Previ, Petros and Funcef said they were collaborating with police. Petros added that the investigation involved decisions made in 2011. Postalis did not immediately respond to a request for comment

Caixa, Bradesco, Banco Santander Brasil and fund manager Rio Bravo Investimentos Ltda confirmed that their asset management units were also targeted by the operation.

Santander Brasil said the federal police asked for documents related to investments by the pension funds in the rig lesser Sete Brasil, which is under bankruptcy protection, and in a fund called Global Equity.

Mercopress

Tags:

You May Also Like

Brazil to Teach World How to Fight Corruption

The United Nations will make use of Brazil’s experience in fighting municipal corruption as ...

Roads, Railways, Waterways, Dams: an Elaborate Plan to Kill the Amazon

The Amazon’s rivers once were sufficient for commerce, now international commodities traders want to ...

Brazil: The Shame of Being the World’s 7th Largest Economy

In the 19th century, Victor Hugo refused to shake hands with Pedro II, the ...

Lula has been sentenced to two decades in jail

Jailed Former Brazilian President Lula Is in Love and Planning His Wedding

Brazil’s imprisoned ex-president, Luiz Inácio Lula da Silva, still loved by large parts of ...

Brazil’s Lula Promises No Stone Unturned in Corruption Probe

Brazilian President Luiz Inacio Lula da Silva promised Monday that in the fight against ...

Inquiry Shows Brasília’s Corruption Saga Might Be Decades Old

Federal government attorneys in Brazil intend to expand their investigation into a corruption ring ...

Future is promising

An expert businessman undertakes an overall assessment of Brazil, its people, its economy. There ...

Don’t Count on the Government Rescuing You, Brazil Tells States

Governors of at least 14 Brazilian states have threatened to declare a state of ...

The Noose Is Tightening for Brazil’s Workers Party

A medical doctor by training, Antonio Palocci was Brazilian former president Luiz Inácio Lula ...