Brazilian Prison System Officials Caught in $22.4 Million Bitcoin Fraud

According to Brazilian news outlet Agência Brasil, authorities in Rio de Janeiro recently uncovered a money laundering scheme in which state officials misstate the budget spent on food for state-run prisons. Bitcoin was reportedly used to exchange some of the scheme’s proceeds, which totaled roughly $22.4 million. After the scheme was discovered, search warrants were issued to 28 different sites, with seven people having been arrested so far. Among those arrested are Rio de Janeiro’s former state secretary of Prison Administration, coronel Cesar Rubens Monteiro, and delegate Marcelo Martins, director of the Department of Specialized Police of the Civil Police.

The money laundering scheme has reportedly been going on since 2001 after a company headed by entrepreneur Filipe Paiva, Induspan, was hired to supply snacks to state-run prisons. An initial contract with the company ended after being analyzed in 2010, as Induspan was charging above market prices, despite employing prisoners at very low rates. After Induspan stopped supplying the prisons, Paiva created a non-profit organization dubbed Primus Initiative. Primus started supplying Rio de Janeiro’s prisons with snacks using Induspan’s rates.

Reference: https://www.ccn.com/brazilian-prison-system-officials-caught-22-4-million-bitcoin-fraud/

Share this: