Former Sao Paulo mayor arrested over financial crimes
Brazilian Federal Police on Tuesday
arrested former Sao Paulo mayor Celso Pitta, banker Daniel Dantas and
businessman Naji Nahas, in an operation against a group that allegedly
committed financial crimes using even insider information at US Federal Reserve
Close to 300 officers were involved in the so-called Operation Satiagraha in Sao Paulo, Rio de Janeiro, Brasilia and Salvador de Bahia. They arrested 21 people and confiscated documents.
Police chief Protogenes Queiroz said Nahas had a "major-contact" who gave him insider information on Fed meetings to determine interest rates.
"We were surprised by many of the indications of manipulations in international financial markets, where (Nahas) profited from (insider) information to invest," Queiroz said in a press conference in Brasilia.
He revealed that the documents confiscated indicate that Nahas and Dantas would be the leaders of the criminal organization. While Nahas was active in the international capital markets, Dantas - the head of the powerful financial group Opportunity -commanded a network that sought to funnel public funds to fake companies, he said.
The Federal police said the two groups were "interconnected" to commit crimes of money laundering, corruption, money laundering, capital flight and tax evasion.
Queiroz said the illegal practices were discovered during an investigation launched in 2005 on allegations that the Workers' Party (PT) of Brazilian President Luiz Inacio Lula da Silva paid bribes to legislators for them to support the government in Congress.
The funds were allegedly divided through bank accounts belonging to the publicist Marcos Valerio de Souza's firms, which in turn got funds from two telephone companies - Telemig and Amazonia Telecom - controlled by Dantas.
According to the investigation, the two phone companies injected close to 80 million dollars into the firm DNA Propaganda, belonging to De Souza, who in turn used the funds to bribe legislators.
In Brasilia, Justice Minister Tarso Genro said the arrests were the result of a three-year investigation.
No details were given of the likely charges against Celso Pitta, who was between January 1997 and December 2000 the first black man to lead Sao Paulo, the largest and richest city in Brazil. During his term, his own ex wife accused Pitta of corruption.
Lebanese-Brazilian businessman Nahas was already charged with stock fraud in 1989, in a crisis which virtually left the Rio de Janeiro Stock Exchange bankrupt. However, he was cleared of these charges in 2005.
Dantas, in turn, was involved in recent years in a dispute over the control of the telecommunications company Brasil Telecom, and he was accused of espionage against high officials of Lula's government, dpa reported.