Brazilian police have arrested 20 people including an employee of UBS on suspicion of crimes including money laundering, tax evasion and illegal transfer of money overseas.
The operation provides further evidence of the willingness of Brazil's police to tackle white collar crime, often with the co-operation of overseas forces. Police said those arrested included three bank employees - two foreign and one Brazilian - six or seven black market currency traders, and wealthy Brazilian individuals.
According to police, the group had been illegally transferring money overseas at a rate of R$7m ($4m) a month for at least the past six months. UBS confirmed that a Swiss-based employee had been arrested in Sao Paulo and that the bank was in touch with the Brazilian authorities. Some 280 federal agents took part in Tuesday's operation, carrying out 44 search warrants in addition to the arrests. Some R$6m in cash was apprehended, together with between $600,000 and $700,000, also in cash.
This is the second federal police operation to involve large foreign institutions in as many months. In October, police arrested 40 people including three acting senior executives and one former president in Brazil of Cisco Systems, the US technology giant, for alleged tax fraud and other crimes involving evasion of up to R$1.5bn in import duties and other taxes.
A person familiar with the matter said it appeared the arrested UBS employee was a low-level member of staff who had no connection to UBS's investment banking operation in Brazil, UBS Pactual. UBS has expanded its operations in Brazil since it bought Pactual, one of a small group of aggressive and successful local investment banks, for $2.6bn last year.
Police said the foreign banks involved in the scheme were offering services, such as banking secrecy, no longer offered by their affiliates in Brazil. The 20 will be held in custody for five days, after which the police may request that they be held for a further five days and following that, for an indefinite period. Nine people arrested in last month's operation, including the former president of Cisco in Brazil, will remain in police custody.
[136] 08.11.2007 Source: Financial Times
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