Brazilian octopus: what’s the charge against the richest banker in the world

Questions to the “statico”

In Brazil, charged the head of the financial Group Safra Joseph Safra, the richest banker on the planet by Forbes magazine. The Prosecutor’s office on Thursday has transferred in court materials, from which it follows that Safra is accused of corruption. Together with the billionaire in a case of allegedly planned the bribery of employees of tax authorities are another five employees of the financial Empire of Zafra. Their names and positions, with the exception of one Manager, were not disclosed.

According to investigators, Safra Group was getting ready to pass to tax officials bribes 15.3 million reais ($4.2 million), so they contributed to the revision available to the group tax claims in the amount of 1.8 billion reais ($500 million). Safra was not involved in the implementation of the plan of bribery directly, but the investigation allegedly has proof that one of top managers of the companies involved in this matter, acted according to his instructions.

The evidence collected in the indictment. It is including about the intercepted conversation between the Director registered in the Cayman Islands Bank Safra Limited joão Inacio Puhoi and tax officials. In this conversation puga allegedly referred to the decision of the man he called “staticom”. The Prosecutor’s office suspects that the financier had in mind exactly Sapru. “In other words, the SLA was its agent”, — quotes The Guardian the indictment. The conclusion referred to the court of the capital of Brazil. Now the court will examine the evidence and decide whether there is enough of them to start the inquiry, writes the Financial Times.

Safra Group considers the accusations baseless. “None of the members of the group did not offer remuneration to any officials, the group did not receive any benefit in making administrative decisions,” the company said in a press release.

If the fault of the defendants in the case however is proven, they face up to 12 years of imprisonment and large fines, The Wall Street Journal writes with reference to that of the prosecution.

Who is Joseph Safra

Joseph Safra is the fourth generation of the Safra banking dynasty. Forbes magazine estimates his fortune at $18.4 billion, Fortune at $18.6 billion According to the Bloomberg billionaires index, it occupies the 63rd place in the ranking of the world’s richest people with a fortune of $13.6 billion

The basis of its prosperity is the Bank Banco Safra S. A. (according to Bloomberg, this is the ninth in the Brazilian Bank by assets — $45 billion) and Swiss Bank J. Safra Sarasin holding. He also owns Safra National Bank of New York, and numerous real estate properties around the world.

In recent years, Safra Group made several major transactions: bought for ₤726 million skyscraper “St. Mary axe, 30” in London, through its controlled group Sucocitrico Cutrale bought the largest American exporter of fruits Chiquita for $1.3 billion. in addition, Bank J. Safra Sarasin holding bought Swiss retail division of Morgan Stanley, and in 2016 plans to complete the acquisition of the retail division of Crédit Suisse in Monaco and Gibraltar. The value of both deals was not disclosed.

Operation “Zelotes”

The investigation into the Safra Group is held as part of operation “Zelotes” initiated by the Federal Prosecutor’s office, the Federal police, internal revenue and the Chief financial officer of Brazil in February 2014. The reason for the investigation was an anonymous letter, which focuses on the conspiracy of the officials of the Ministry of Finance with the business.

Now the Brazilian authorities believe that at least 70 Brazilian companies were paying bribes to officials of a special unit of the Ministry of Finance of the country — the administrative appeals Board on tax disputes (CARF) — in exchange for making favorable decisions for them. Investigators are interested in 74 cases that occurred from 2005 to 2013, when CARF was annulled the decision of the internal revenue Service regarding tax collection. Has been proved the amount of damage to the state amounted to $1.63 billion and can grow up to $5,96 billion.

The CARF staff members used their right of access to internal information to identify “potential clients”: they then establish contact through the consulting and legal companies. The amount of the kickbacks amounted to 10% when companies were required to shave off a debt worth at least 1 billion reais ($275,3 million).

The number of companies undergoing inspection, industrial, engineering, agricultural and financial groups, including the Safra Group. Sources reported to Reuters in March last year, the investigation in the headquarters of the Bank Safra were searched.

In the view of security officers are also included: company LFT consulting Marketing Esportivo, owned by Luiz Claudio Lula da Silva, the son of the former President of Brazil Luiz inácio Lula da Silva and Brazil’s largest steelmaker Gerdau, which had allegedly evaded paying tax debt in the amount of 1.5 billion reais ($379 million). As the newspaper Financial Times, in February of last year the consequence has issued 18 warrants for searches at the company’s offices in five Brazilian States and summoned the company’s CEO Andre Gerdau of Johannpeter, whose father is one of the closest advisers of President Dilma Rousseff.

Political payback

Operation “Zelotes” is in parallel with the investigation of corruption schemes in state-owned company Petrobras. During “operation car Wash”, which is from March 2014, allegations of corruption were brought against more than one hundred leading politicians and businessmen of the country. The investigation accuses them of organizing a criminal scheme, which was that companies received contracts in exchange for kickbacks to officials and legislators. Among those arrested is the Treasurer of the ruling workers ‘ party, joão vaccari, leader of its faction in the Senate Delcidio Amaral and one of the richest businessmen of Brazil, the participant of list Forbes, the banker Andre Esteves (his condition at the time of arrest was estimated at $1.81 billion). Petrobras estimates its damage at $2.1 billion.

In early March for questioning was summoned and the former President da Silva — he is suspected of illegal lobbying and “influence peddling”. His successor, President Rousseff also could be implicated in Petrobras corruption schemes, from 2003 to 2010 she was Chairman of the Board of Directors of the company. At the present time concerning her initiated impeachment proceedings on suspicion of fraud and budget fraud in the electoral campaign.