SAO PAULO (AP) – Brazilian police initiated a significant operation on Thursday aimed at dismantling a major tax evasion and money laundering scheme within the fuel sector. Authorities disclosed that the group under investigation is the largest tax debtor in Brazil, with debts exceeding 26 billion reais, equivalent to approximately $4.8 billion. The operation encompasses 126 search and seizure warrants targeting both individuals and companies across five different states.
Brazil's Federal Revenue Service reported that the organization utilized its own companies, investment funds, and offshore entities to obscure and protect its profits. While officials refrained from publicly naming any individuals or companies involved in the scheme, local media outlets have pointed to Grupo Fit, a prominent fuel refinery, as a possible entity under investigation. Grupo Fit has not yet responded to inquiries from the Associated Press regarding the ongoing investigation.
Finance Minister Fernando Haddad emphasized that this crackdown is part of a broader initiative to address criminal connections within Brazil's fuel supply chain. In August, authorities identified 40 fuel-sector investment funds that were allegedly employed to conceal assets linked to members of the First Capital Command (PCC) crime syndicate. The PCC is notorious for being Brazil's most powerful organized crime group, founded in 1993 within the Taubate Penitentiary in Sao Paulo to advocate for improved prison conditions. However, it has since expanded its influence to orchestrate drug trafficking and extortion operations outside prison walls.
Haddad elaborated that investigations have uncovered a pattern of capital flight, which included the establishment of investment funds in the United States. Federal authorities have traced over 15 offshore entities based in the U.S. that transferred around 1 billion reais (about $186 million) back to Brazil, primarily intended for purchasing equity stakes and real estate.
The scheme reportedly involved creating money-laundering operations in Delaware, which Haddad described as a tax haven in the United States used for a substantial international triangulation scheme. One of the latest operations reportedly involved a transfer of 1.2 billion reais (approximately $223 million) directed to funds situated in Delaware.
The mechanics of the scheme were detailed by Haddad, who explained that loans are supposedly issued to these funds—loans likely never intended to be repaid—and the funds subsequently return to Brazil, disguised as legitimate investments in economic activities. However, Haddad asserted that the money being sent abroad does not have any legitimate source.
As part of this ongoing effort, Haddad has communicated to President Luiz Inácio Lula da Silva his commitment to enhance international cooperation with the United States in combating organized crime and money laundering, alongside ongoing tariff discussions with U.S. President Donald Trump. This operation represents a significant step in Brazil's vigorous battle against the intricate web of financial crime that has infiltrated the nation's fuel sector.
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Gabriela Sá Pessoa, The Associated Press
