The Betrayal of Brazil

A member of the Homeless Workers Movement carries a Brazilian flag past burning tires during a protest against the money spent on the World Cup near Itaquerao stadium which will host the international soccer tournament's first match in Sao Paulo, Brazil, Thursday, May 15, 2014. Brazilians are angry at the billions spent to host the World Cup, much of it on 12 ornate football stadiums, one-third of which critics say will see little use after the big event. (AP Photo/Andre Penner)
A member of the Homeless Workers Movement carries a Brazilian flag past burning tires during a protest against the money spent on the World Cup near Itaquerao stadium which will host the international soccer tournament's first match in Sao Paulo, Brazil, Thursday, May 15, 2014. Brazilians are angry at the billions spent to host the World Cup, much of it on 12 ornate football stadiums, one-third of which critics say will see little use after the big event. (AP Photo/Andre Penner)
A member of the Homeless Workers Movement carries a Brazilian flag past burning tires during a protest against the money spent on the World Cup near Itaquerao stadium which will host the international soccer tournament’s first match in Sao Paulo, Brazil, Thursday, May 15, 2014. Brazilians were angry at the billions spent to host the World Cup, much of it on 12 ornate football stadiums, one-third of which critics say will see little use after the big event. (AP Photo/Andre Penner)

 

(Bloomberg) – In mid-2013, Brazilian federal police investigator Erika Mialik Marena noticed something strange.

Alberto Youssef, suspected of running an illicit black-market bank for the rich, had paid 250,000 reais (about $125,000 at the time) for a Land Rover. The black Evoque SUV ended up as a gift for Paulo Roberto Costa, formerly a division manager at Brazil’s national oil company, Petrobras. “We were investigating a money-laundering case, and Petrobras wasn’t our target at all,” says Marena. “Paulo was just another client of his. So we started to ask, ‘Why is he getting an expensive car from a money launderer? Who is that guy?’”

Marena had spent the previous decade building cases against money launderers, and Youssef had been a perennial target. He’d been arrested at least nine times for using private jets, armored cars, clandestine pickups by bagmen, and a web of front companies to move illicit cash. But Youssef had been spared serious jail time by testifying repeatedly against other doleiros, Brazilian slang for specialists in laundering unreported cash.

The Petrobras connection suggested Youssef was into something bigger. Marena and her partner, investigator Márcio Anselmo, dug into Costa from offices in the modern glass-and-concrete federal police headquarters in the city of Curitiba, 400 kilometers (250 miles) south of São Paulo. A dozen more investigators and prosecutors joined, and the case grew so big that Brazil’s attorney general set up a task force in temporary office space across town.

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