Brazilian doleiros ply their trade.
… one São Paulo doleiro, for example, known as “Wanted Suspect No. 24,” who appears in the principal report on the operation as the owner of an offshore firm called Watson, in the British Virgin Islands, is accused of moving, on his own, in a single year, some US$598 million.
The federal police will open a probe of 3,500 persons and firms suspected of illegal financial transfers to the United States between 1999 and 2002. The persons under investigation are politicians, entertainers, football players and civil servants. Included on the list are banker Daniel Dantas of Opportunity (also suspected of ties to the [“Belo Horizonte Baldy Trans-New Iberian Pipeline of Political Slush Funds”], [iconic Globo] TV personality Xuxa Meneguel, and [1,000 goal-scoring] football star Romário. The names of federal lawmakers are also cited, in which cases the PF will have to ask the Supreme Court for authorization to investigate. –October 1, 2005, citing “news agencies”
“We are not going to become some kind of Grand Caymans on the Hudson.” –Manhattan DA Morgenthau on the proof against Maluf.
Consultor Jurídico (Brazil) introduces me to a new concept: the CC5 account.
A 21 August 2006 note from a personal-interest clippings site on news of financial crimes fills in some of the background.
Representatives of a task force set up by the Brazilian federal government to investigate the extent of clandestine money transfers in the country’s so-called “parallel market” told journalists in early June that their work so far had revealed the activities of 64 illegal money transferors (known in Brazil as “doleiros“) resulting in the movement of $19.53 billion from Brazil to banks in the United States between 1996 and 2003.
That would be $20 billion on which no taxes got paid — money that might have, you know, funded the repaving of this bumpy, ramshackle little street we live on — where 19th century paralelepípedos peek through a thin layer of tar — or something.
Seriously: some guy who offers to meet you at a given time and place to do face-to-face cash deals — the Internet angle was that you arranged these meetings through the magic of e-mail! — managed to describe the scheme as an instance of Web 2.0 so convincingly that it was featured on a prominent “what’s new in Web 2.0” Web site.
Which made me laugh until milk shot out of my nose.
The totals were reportedly derived from investigations carried out by the CC5 task force which was charged with looking into alleged abuses of the use of certain bank accounts- known as CC5 accounts — permitted by Brazil’s Central Bank to be used for legitimate foreign fund transfers. Investigations over the last few years have found that certain CC5 accounts were used in large-scale money laundering activities, often allegedly carried out using doleiros as intermediaries, which were found to be related to money laundering networks at certain New York banks. (See “Financial Crime News” Special Report “Dollars, Doleiros, and Dominos: South American Money Scandals” July 2005, which also includes information on the “Tri-Border Region.”)
A recent case:
Os empresários Raul Zuniga Brid e Diego Ortiz de Zevallos vão responder Ação Penal por envio ilegal de mais de US$ 70 milhões para o exterior por meio de uma conta CC5 do Excel Banco. A conta era em nome da Armong Financial Corporation, empresa do tipo offshore com sede nas Ilhas Virgens Britânicas. A empresa tem como diretores Brid e Zevallos, ambos domiciliados no Panamá.
Businessmen Raul Zuniga Brid and Diego Ortiz de Zevallos will respond to criminal charges for the allegedly illegal transfer of more than $US70 million abroad through a CC5 account at Excel Bank. The account was in the name of the Armong Financial Corporation, an offshore corporate headquartered in the British Virgin Islands. Bri and Zevallos, both residents of Panama, are directors of Armong.
That’s actually “Zuñiga Brid,” as I discover from googling the guy.
Segundo a denúncia do Ministério Público, a conta foi aberta em 1991 com procuração outorgada por Brid e Zevallos a advogados brasileiros. Havia também autorização para que o co-réu Eduardo German Weisz Farach fizesse as movimentações financeiras.
According to the indictment, the account was established in 1991 by Brid, Zevallos and Brazilian lawyers. There was also an authorization for co-defendant Eduardo German Weisz Farach to conduct financial transactions on their behalf.
A apuração verificou que a conta recebia apenas depósitos, a maioria de pessoas físicas e jurídicas brasileiras. O dinheiro era destinado à compra de moedas estrangeiras no mercado financeiro. Posteriormente, eram transferidas para contas no exterior. O laudo pericial apontou que essas operações de câmbio totalizaram mais de US$ 70 milhões.
Investigations showed that account activity was confined exclusively to deposits, most by Brazilian individuals and firms. The money was used to buy foreign currency on the market. Later, those funds were transferred abroad. The expert report points to currency exchange transactions totaling more then US$70 million.
ConJur noted a landmark case in this area in 2004:
A revista Consultor Jurídico teve acesso com exclusividade ao disquete com a toda a elaboração da Operação Farol da Colina. O dossiê foi terminado pela Força Tarefa CC5, da Polícia Federal do Paraná, em 26 de maio passado, e encaminhado ao juiz federal Sérgio Fernando Moro, de Curitiba.
This magazine had exclusive access to the diskette with all the data on Operation [Hilltop Beacon]. The dossier was compiled by the CC5 Task Force of the Federal Police in Paraná last May 26, , and sent to federal judge Moro in Curitiba.
Na tarde desta quinta-feira duas laudas foram anexadas ao documento, com os nomes de 24 doleiros ainda foragidos. Para não atrapalhar os trabalhos ainda em curso da Operação, a revista ConJur omite parte do dossiê, bem como os nomes dos doleiros procurados. Mas um doleiro de São Paulo, por exemplo, que consta como o procurado de número 24, aparece no relatório-mãe da operação como dono da off shore Watson, nas Ilhas Virgens Britânicas, no Caribe, acusado de ter movimentado sozinho, em apenas um ano, US$ 598 milhões.
Two reports were attached to the document this Thursday with the names of 24 doleiros who remain at large. In order not to get in the way of further investigations, we are omitting part of this dossier, as well as the names of the doleiros who are being sought. But one doleiro in São Paulo, for example, known as “Wanted Suspect No. 24,” who appears in the principal report on the operation as the owner of an offshore firm called Watson, in the British Virgin Islands, is accused of moving, on his own, in a single year, some US$598 million.
E, por falar em doleiros, nesta quinta-feira deputada federal Iriny Lopes (PT-ES) pediu a continuidade da CPI Mista do Banestado. A deputada, entre vários requerimentos que apresentou à CPMI, pediu que fossem ouvidos pela comissão Manuel Monteiro Cortez Filho, Carlos Alberto Taveira Cortez, Samuel Messod Benzecry, Messod Gilberto Samuel Benzecry, articulados na casa de câmbio Cortez Câmbio e Turismo, atuante no eixo Belém-Manaus. Samuel Benzecry ainda está foragido.
And speaking of doleiros, this Thursday, federal deputy Lopes moved to extend the Mixed CPI of Banestado. Among other motions, she asked that the commission take testimony from Manuel Monteiro Cortez Filho, Carlos Alberto Taveira Cortez, Samuel Messod Benzecry, Messod Gilberto and Samuel Benzecry, all working out of Cortez Câmbio e Turismo, along the Belém-Manaus axis. Samuel Benzecry is still a fugitive from justice.
There is an enormous effort from some quarters to brand the Banestado probe, for the history books, as a flop, but I am reading its final report and finding it quite interesting, actually.
On the Farol da Colina [Hilltop Beacon], from a contemporary wire service story:
A Polícia Federal vai abrir inquérito contra 3.500 pessoas e empresas suspeitas de fazer remessas ilegais para os Estados Unidos entre 1999 e 2002. Os alvos das investigações são políticos, empresários, artistas, jogadores de futebol e servidores públicos.
The federal police will open a probe of 3,500 persons and firms suspected of illegal financial transfers to the United States between 1999 and 2002. The persons under investigation are politicians, entertainers, football players and civil servants.
Below, the figure given is 8,500, however.
Na lista estão o banqueiro Daniel Dantas, do Opportunity (suspeito também de conexões com o “valerioduto”), a apresentadora Xuxa Meneguel e o jogador Romário. Também há parlamentares citados; no caso deles, a PF terá de pedir autorização do Supremo Tribunal Federal para abrir inquérito.
Included on the list are banker Daniel Dantas of Opportunity (also suspected of ties to the [“Belo Horizonte Baldy Pipeline of Political Slush Funds”], TV personality Xuxa Meneguel, and football star Romário. The names of federal lawmakers are also cited, in which cases the PF will have to ask the Supreme Court for authorization to investigate.
From the “Simpsons Go to Rio” episode — Home is reading this guidebook on Ipanema Beach in Rio — modified to support the common talking point that “under FHC, they stole millions, but Lula has stolen billions.” There is little or not evidence that this is true.
Os acusados fizeram remessas que variaram entre US$ 30 mil a mais de US$ 20 milhões, através de uma espécie de sistema financeiro clandestino, que movimentou mais de US$ 20 bilhões entre 1997 e 2002. As operações empregaram doleiros que administravam 40 subcontas da Beacon Hill, uma superconta aberta pelo guatemalteco Anibal Contreras no JP Morgan, de Nova York. As subcontas eram administradas por cem doleiros brasileiros.
The accused made transfers that ranged from $30,000 to more than $20 million through a clandestine financial system that moved more than $20 billion between 1997 and 2002. The transactions used doleiros who handled 40 accounts at Beacon Hill, a super-account opened by the Guatemalan Anibal Contreras at JP Morgan in New York. The subaccounts were controlled by Brazilian doleiros [black-market currency brokers].
Rastreamento durou 13 meses
13 months of tracing funds
Na Operação Farol da Colina, deflagrada no dia 17 de agosto do ano passado, a PF prendeu 70 dos 123 maiores doleiros do país, supostamente envolvidos com as remessas ilegais. A partir daí, a PF e a Receita Federal começaram a identificar as 8.500 pessoas e empresas clientes destes doleiros. Para facilitar o trabalho, a PF concentrou as investigações só nos autores de remessas acima de US$ 30 mil. A Receita está atuando sobre aqueles que enviaram dinheiro a partir de 1999. Os crimes fiscais anteriores a esta data estão prescritos.
In “Lighthouse on the Hill,” launched August 17, 2004, the federal police arrested 70 of the 123 biggest doleiros in Brazil for alleged involvement in illegal fund transfers. Based on that action, the PF and the federal tax authority began following up on 8,500 clients of these doleiros. To facilitate the work, the PF concentrated only on transfers over $30,000.
That figure is given as 8,500 above, I think.
The smurfs got off scot free.
The U.S. smurfing limbo-stick is set at $10,000, I think.
The tax authority looking at those who sent funds starting in 1999. The statute of limitations has run on financial crimes committed before that date.
A Receita também preparou uma lista de 200 servidores que recorreram a doleiros para mandar dinheiro para o exterior. A suspeita é que vários deles fizeram remessas incompatíveis com rendimentos declarados. A PF também deverá abrir inquérito contra esse grupo.
The federal revenuers also drew up a list of 200 civil servants who used doleiros to send money abroad. The suspicion is that a number of these made transfers in amounts incompatible with their reported incomes. The PF is also looking at this group.
I will have to follow up on that case.
Risk management takeway, in the meantime: The Brazilian tax man does not seem to be in the mood for “imaginary news and nonsense” or “innovations in Finance 2.0.”