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American ShipperWarehouse

Brazil busts trade fraud network with U.S. help

Brazil busts trade fraud network with U.S. help

   Authorities in Brazil and the United States have teamed up to dismantle an alleged scheme that undervalued U.S. exports to Brazil and allowed for the evasion of more than $200 million in Brazilian customs duties over a five-year period.

   Julie Meyers, head of U.S. Immigration and Customs Enforcement, said Friday that ICE agents in Miami and Brazil worked together in a massive investigation known as “Operation Deluge,” leading to 128 arrests in Brazil, including owners of several large Brazilian companies that distributed imported electronics, as well as several federal and state Brazilian government officials.

   ICE said that last Wednesday some 950 Brazilian federal police agents and another 350 Brazilian Customs agents executed search warrants at 238 locations across Brazil. In a related operation in Miami, ICE agents assisted by Brazilian authorities searched two warehouses and one residence in Miami described as being controlled by Brazilian businessmen under scrutiny in the overall investigation.

   The Miami team seized an estimated $500,000 in goods slated for export to Brazil in what was allegedly part of the fraudulent scheme to under value products, the Department of Homeland Security agency said.

   ICE officials said “Operation Deluge” was a lengthy investigation conducted by Brazilian authorities working with the ICE attach' in Brazil, as well as with the recently formed Trade Transparency Unit (TTU) in Brazil.

   The alleged scheme was headed by a wealthy businessman from Sao Paolo and included “front companies” created in Uruguay, Panama, the British Virgin Islands and in the state of Delaware, according to ICE.

   The TTU was formed in March in an effort to combat trade-based money laundering and other finance-related crimes in Brazil and the United States.

   “The results of this massive trade fraud investigation demonstrate what can be achieved when law enforcement agencies from different nations work together. This cooperative operation dismantled an unscrupulous ring that cost the Brazilian government hundreds of millions of dollars. The searches and arrests are the first to result from collaboration between Brazilian authorities and ICE agents through our joint Trade Transparency Unit initiative. We believe this case is the beginning of many future successful joint ventures with the Brazilian government,” Meyers said.

   ICE said that TTUs have also been formed in Colombia, Argentina and Paraguay.

   “Under this initiative, ICE and law enforcement agencies in these nations are creating dedicated units and joint computer databases to facilitate the exchange of export/import data and financial information. By jointly analyzing the shared data, these TTUs are able to detect and investigate anomalies in international commerce that may be indicative of trade-based money laundering or other criminal activities,” ICE said.