PlayIconNav
BTC
$67,835.87+1.32%
ETH
$3,253.71+0.09%
BNB
$584.41+1.04%
SOL
$183.35+3.55%
XRP
$0.59931056-0.92%
DOGE
$0.13465152+4.18%
CD20
$2,289.15+1.63%
TON
$6.67-0.68%
ADA
$0.41482424+1.73%
TRX
$0.13742831+0.56%
AVAX
$28.63+2.73%
WBTC
$67,945.41+1.44%
Ad
Markets

Brazilian Officials Caught Using Bitcoin in $22 Million Scam

Corrupt Brazilian officials have been caught allegedly using bitcoin to divert millions in public funds that were intended for prison supplies.

By Leigh Cuen
AccessTimeIconMar 14, 2018 at 6:40 p.m. UTC
Updated Sep 13, 2021 at 7:41 a.m. UTC
Flag

Police officials in Rio de Janerio have uncovered a money laundering scheme in which state officials siphoned off money intended for prison supplies, using bitcoin to exchange some of the proceeds.

The scam involved misstating the budget spent on food for state-run prisons, ultimately diverting funds worth $22.4 million – though only a small portion of the total was converted into bitcoin.

According to local reports, warrants were issued to search 28 sites, with seven people being held so far. Former police chief Marcelo Martins and the former head of the state prison system, Cesar Rubens Monteiro Carvalho, were arrested in connection with the racket on Tuesday.

Warrants have also been issued for several other suspects. At least one state official said the scheme was spearheaded by former Rio de Janerio governor Sérgio Cabral, who was sentenced to 14 years in prison in 2017 for charges that included corruption and money laundering.

Agência Brasil

reports that the money laundering scheme has been going on since 2001, long before some of the participants started converting cash into bitcoin.

The Superintendent of the Internal Revenue Service in Rio de Janeiro, Luiz Henrique Casemiro, reportedly said (via translation):

"We drew attention, in the Federal Revenue, regarding this specific operation, because for the first time [the] operations [involved] bitcoin. ... [There] were remittances made with the purchase of bitcoin."

Brazil flag image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.