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Brazil Police Crack Down on Tax Scheme 11/28 06:09
SAO PAULO (AP) -- Brazilian police launched Thursday a police operation to
dismantle a major tax evasion and money-laundering scheme in the fuel sector.
The group under investigation is the country's largest tax debtor, owing more
than 26 billion reais ($4.8 billion), authorities said. Local and state
authorities are carrying out 126 search and seizure warrants targeting
individuals and companies in five states. According to Brazil's Federal
Revenue, the organization used its own companies, investment funds and offshore
entities to hide and shield profits.
Officials did not name any individuals or companies targeted, but local
media reported the operations under investigation involve Grupo Fit, a fuel
refinery. Grupo Fit did not immediately respond to a request for comment from
The Associated Press.
Finance Minister Fernando Haddad said Thursday's actions stem from a recent
crackdown on criminal links to Brazil's fuel supply chain. In August,
authorities flagged 40 fuel-sector investment funds allegedly used to hide
assets for members of the First Capital Command crime syndicate, or PCC.
PCC is Brazil's biggest and most powerful organized crime group. It was
founded in 1993 by hardened criminals inside Sao Paulo's Taubate Penitentiary
to pressure authorities to improve prison conditions. It quickly started using
its power to direct drug dealing and extortion operations on the outside. Over
the past few years, the gang has diversified their investment portfolios into
various illicit markets.
Haddad said that investigations have since identified a pattern of capital
flight that included opening investment funds in the United States. Federal
authorities said they identified more than 15 U.S.-based offshores sending
roughly 1 billion reais ($186 million) back to Brazil to buy equity stakes and
real estate.
Suspects set up money-laundering operations in Delaware, which the finance
minister called "a tax haven in the United States" used for "a serious
international triangulation scheme." One of the group's latest operations
involved 1.2 billion reais ($223 million) sent to funds in the U.S. state, he
added.
"The scheme works like this: Loans are issued to these funds -- loans
suspected of never being repaid -- and the money then returns to Brazil as
supposedly legal investments in economic activities," Haddad said. "But the
money sent abroad is not legitimate."
Haddad said he pledged to President Luiz Incio Lula da Silva to seek deeper
international cooperation with the United States against organized crime and
money laundering, amid tariff negotiations with U.S. President Donald Trump.
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