Key insights
- Brazilian authorities are investigating tax evasion involving a fuel conglomerate, targeting a former Rio governor and the owner of Refit. The Supreme Court froze $10.4 billion in assets and requested Interpol's involvement. While primarily a Brazilian issue, the US connection via the Refit owner and potential money laundering implications create a slight negative influence on market sentiment.
SAO PAULO, May 15 (Reuters) - Brazil’s federal police targeted former Rio de Janeiro governor Claudio Castro and the owner of privately owned refinery Refit Ricardo Magro in a probe related to suspected tax evasion, two sources close to the investigation told Reuters on Friday.
Neither Castro or Magro immediately responded to requests for comment by Reuters.
In a statement without naming suspects, the police said it launched an operation to investigate a fuel industry conglomerate suspected of asset concealment, disguising assets, and transferring funds abroad.
The Supreme Court ordered the freezing of approximately 52 billion reais ($10.4 billion) in assets and the suspension of the economic activities of the companies under investigation, according to the statement. The court also determined that the suspect should be included in Interpol’s Red Notice, it added.
CONTEXT
Since last year, Brazil’s tax authority has played a central role in major operations uncovering money laundering schemes linked to criminal organizations in the fuel sector, identifying multiple operations abroad.
Brazilian President Luiz Inacio Lula da Silva has publicly called on U.S. President Donald Trump to arrest the owner of Refit, one of the main companies involved in the scheme, who resides in the United States.
Claudio Castro resigned from office in Rio de Janeiro in March. That same month, Brazil’s electoral court barred him from holding office for eight years for abuse of political and economic power, prohibited conduct, and illicit fundraising in the 2022 general election.
($1 = 4.9850 reais)