Caixa's acquisition of Panamericano under investigation for fraud

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Thursday, April 20, 2017

Brazilian state-run bank Caixa Econômica Federal's purchase of a stake in Banco Panamericano eight years ago is now being investigated by Brazil's federal police and the attorney general's office on suspicions of fraud.

According to the federal police, an investigation known locally as Operação Conclave, carried out 46 search and seizure warrants in Brasília, São Paulo, Rio de Janeiro, Belo Horizonte, Recife and Londrina on Wednesday.

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Some 1.5bn reais (US$474mn) was frozen in the accounts of those being investigated as a precautionary measure.

The acquisition of the bank by Caixa Participações allegedly caused significant losses of public funds and possibly to Caixa clients too.

The parties accused include executives from Caixa and media group Silvio Santos, as well as the former CEO and chairman of investment bank BTG Pactual, André Esteves, who was arrested in November 2015 for his alleged participation in the Lava Jato corruption scandal, business daily Valor Econômico reported.

Those accused of participating in the scheme are being investigated for negligent or fraudulent management, as well as other crimes that may have been uncovered during the searches. If charged and found guilty, they could receive up to 12 years in prison.