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Invisible Violence | Dissecting a Hell of a Scam

Mateus Roberte Carias

Mateus Roberte Carias

Via G1, an anticorruption campaign of staggering proportions merits a bureaucratic rewrite of the press release buried on a back page and wholly absent from the boob tube.

[On July 2] the  Polícia Federal rolled out Operation Invisible Violence, which targets a criminal conspiracy that siphoned off public funds from  more than 100 cities in 11 states, including Minas Gerais.

In Minas Gerais alone, R$ 70 million was misappropriated.

According to the Polícia Federal, 11 cities in Minas Gerais were affected by the criminal scheme: Capelinha, Caratinga, Ipatinga, Itambacuri, Águas Vermelhas, Janaúba, Montes Claros, Pirapora, Rio Pardo de Minas, Várzea da Palma and Varzelânia, as well as  Cisrum — The Intermunicipal Health Consortium for Urgent Treatment in Northern Minas. The PF said that more than R$ 70 million had been diverted from their proper destination.

According to Polícia Federal, the conspiracy comprises a corporation, individual conspirators, civil servants and ex-mayors who defrauded competitive bidding processes, redirecting the results of the process to a company belonging to the criminal organization.

More than 100 police are serving 20 search and seizure warrants, 21 warrants freezing goods and assets, 3 arrest warrants and 9 temporary arrest warrants. Three of the temporary arrest warrants name former mayors of cities in the interior of  Minas Gerais.

It bears reiterating, for those of you who expect to hear that Brazilian officials are soft on crime: During the Lula government, the federal police trebled its anticorruption activities, including investigations of prominent lulists.

I am a little dim on the proper translation of the term precatório, which I believe is a fixed income note issued by municipal governments  to cover its federal tax debit. No, wait: It is a public debt incurred as a result of legal action.

According to the PF, Mateus Roberte Carias set up the company  Digicorp Consutoria e Sistemas, which offered municipalities letters of credit with the federal government, to be used as compensation for a federal tax burden. The papers were offered at a 30% discount and acquired by a competitive bidding process allegedly controlled by the company.

“But as it happens the securities were false and the law forbids municipalities to make good on tax obligations using credit from third parties,” said Marcelo Freitas.

Mateus Carias had been arrested in Operation Camaro, in April 2012, for similar practices. At the time, he had entered into contracts with 180 townships, intermediated by Urbis Instituto de Gestão Pública, to repay tax credits using false information and the obtaining of temporary court orders.  In a December interview with the PF, he alleged that he had negotiated credits and debts resulting from lawsuits presented by the law firm of Merizio & Giuberti Louzada Advogados Associados, another target of the investigation.