Brazilian police looking at Itaú, BankBoston in corruption probe

Thursday, December 1, 2016

Brazil's federal police launched the latest phase of the Operation Zelotes corruption investigation on Thursday, which is looking into the alleged manipulation of decisions made by the federal administrative tax appeals council (Carf).

Some 100 officers served 34 warrants in the states of São Paulo, Rio de Janeiro and Pernambuco related to the investigation.

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"This new stage of the operation points to the existence of collusion between a Carf council member and a financial institution between the years 2006 and 2015," the federal police said in a statement. "The criminal scheme involved law firms and consulting firms," it added.

While the official statement did not cite any specific targets, local media reported that Brazil's largest private bank, Itaú Unibanco, and BankBoston are among those under investigation, and that search warrants had been issued for their buildings.

Itaú confirmed to local news site UOL that their buildings had been searched, but said that officers were focused on documents related to BankBoston, which the Brazilian bank purchased in 2006 for 4.5bn reais (US$1.30bn).

The alleged participants in the scheme could face corruption and money laundering charges, among others.

The Carf is an administrative court that is subordinated to the Ministry of Economy and which is responsible for considering appeals filed by taxpayers and the Brazilian tax authority (RFB) against decisions issued by the panel of the federal lower administrative tax court (DRJ).