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Operation Micah | The Man With Dishonest Scales

money_laundering_scheme_big

Source: Agência Brasil/DPF/UNDOC

Shall I acquit a man with dishonest scales, with a bag of false weights?  Her rich men are violent; her people are liars and their tongues speak deceitfully.  Micah, 10-11

Subject: Federal Police Operation Micah

Brasília – Federal police today carried out Operation Micah, with the objective of  taking down two criminal organizations accused of money laundering and mismanagement of public retirement funds. More than 300 police were assigned to serving 102 warrants. .

Why “Micah”? The federal police will often explain its irony-laden labels for major cases.  These can get pretty recondite. Perhaps  the PF official case-namer refers to the famous “covenant lawsuit” (6.1-8),

… a distinct genre in which Yahweh (God) sues Israel for breach of contract, that is, for violation of the Sinai covenant.[8] … Micah reproaches unjust leaders, defends the rights of the poor against the rich and powerful, and preaches social justice

In the meantime, in the News,

The PF says it is serving 75 search warrants, five preventive arrest warrants and 22 temporary detainments in the following states: Distrito Federal, São Paulo, Rio de Janeiro, Minas Gerais, Mato Grosso, Mato Grosso do Sul, Goiás, Maranhão, Amazonas and Rondônia.

In a note to the press, the PF said it has spent a year and a half investigating money laundering through the bank accounts of shell corporations and individual fronts. Over time, PF because aware of companies that function as a money laundering outsourcer for the laundry of money from various crimes.

In other words, each money laundering charge will carry with it an underlying crime. This is what makes siccing the PF on white-collar criminals a priority

The  money was credited to the bank accounts of the companies under investigation and the illegal sums circulated constantly through its related companies. In 18 months, R$ 300 million was withdrawn. To avoid detection by regulators, the criminals would change their front or shell company from time to time.

The PF identified a number of diverse “criminal cells” in the organization, divided into three nuclei. Investigators say the money launderers received support from the federal district judicial police. The leaders also greased the palms of mayors and program managers of the Insurance and Pension ministry, hoping to get the pension funds to invest in investment fund of poor quality, issued by the gang itself and highly likely to fail.

Sounds like a pyramid scheme — an ambitious one,at that.

These funds  consisted of “junk paper” and these pension plans that held them suffered losses,” the PF said. The mayors and managers that adhered to the scheme were repaid with a percentage of the take.

The episode recalls the Maluf Affair, which also involved the issuance of debt instruments to be sold to the public. It was so pathetic to see a dying Celso Pitta being dragged the muck — but then again, serving as sovereign issuer and an inside-trader of the same security is … not a good thing.

Irregularities of this kind were found in the pension offices of Manaus, Ponta Porã  and Murtinho (MS), Queimados (RJ), Formosa, Caldas Novas, Cristalina, Águas Lindas, Itaberaí, Pires do Rio and Montividiu (GO), as well as Jaru (RO), Barreirinhas, Bom Jesus da Selva e Santa Luzia (MA).

The arrested and indicted figures will face charges of fraudulent management, managing an unauthorized stock account, paying and receiving bribes, money laundering and forgery of official papers.