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  HOME | Brazil (Click here for more)

Brazil’s Petrobras Probe Reveals Use of Luxury Goods as Money Laundering Tool

RIO DE JANEIRO – Politicians and executives implicated in a massive corruption scheme centered on Brazilian state-controlled oil company Petrobras have bought luxury goods ranging from Renoir, Miro and Dali paintings to Cartier pearl necklaces to a yacht in a bid to hide their criminal proceeds, the investigation has revealed.

Laundering money by purchasing artwork, jewelry and luxury boats and vehicles is nothing new, but some of the items seized since the so-called Car Wash probe began in 2014 have garnered media attention.

One prominent case has been that of the former speaker of Brazil’s lower house, Eduardo Cunha, who is currently jailed on charges of accepting tens of millions of dollars in kickbacks from Petrobras contractors.

Aided by photos that Cunha’s wife, Claudia Cruz, uploaded to social media, investigators were able to trace accounts they say the couple held overseas.

Among the luxury items purchased by Cruz were Hermes, Valentino and Fendi brand jewelry, clothing, shoes and purses.

Cunha, a conservative evangelical, has denied any wrongdoing.

Sharing the same passion for luxury was former Rio de Janeiro Gov. Sergio Cabral, who is accused of using offshore accounts to hide some $100 million stemming from bribes and the diversion of public funds earmarked for, among other things, projects to improve Rio’s slums.

Among the most expensive objects found at the home of Cabral and his wife, Adriana Ancelmo, were three gold rings encrusted with rubies, diamonds and emeralds, a Cartier pearl necklace and watches valued at tens of thousands of dollars.

One of Cabral’s favorite pastimes, meanwhile, was to ride in a luxury yacht that was valued at nearly $3 million and listed in the name of a front company.

The former services director at Petrobras, Renato Duque, was one of the first to be charged in the corruption scheme, in which large construction companies paid bribes to corrupt executives at the oil giant to secure inflated contracts and kickbacks were delivered to politicians providing cover for the graft.

Duque, who was convicted of corruption and money laundering in 2015 and sentenced to more than 20 years in prison, used some of the ill-begotten funds to purchase more than 130 works of art, including Spanish painter Joan Miro’s “Charivari.”

The Miro lithograph is now being housed at the Oscar Niemeyer Museum in the southern Brazilian city of Curitiba, where more than 300 paintings seized during the investigation are being kept, including works by renowned artists such as Jean Renoir, Salvador Dali and Vik Muniz.

A Brazilian judge and money laundering expert, Fausto de Sanctis, wrote in a 2013 book that a lack of controls in the art market make it ideal for transforming illicit funds into ostensibly legitimate assets.

“A work that is worth $8 million or $10 million can be rolled into a cylinder and no one notices,” the judge said.

In Duque’s case, he stashed his treasures away in a wardrobe that he opened by remote control.

 

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