Pierpaolo Bottini, a senior lawyer in Brazil and former director of the Economic Criminal Law at the Brazilian Institute of Criminal Sciences, has brought attention to a shift in the methods used by money launderers in response to the notable Lava Jato investigations, which uncovered widespread public corruption. According to Bottini, these investigations have pushed criminals towards adopting cryptocurrencies as a tool for hiding illicit funds. Despite the dissolution of the Lava Jato task force in 2021, Bottini, who practices at São Paulo-based Bottini & Tamasauskas Advogados, continues to encounter this trend in his defense work.
Bottini has noted that his current cases primarily involve charges of using cryptocurrencies for laundering money, with the underlying crimes being corruption related to competitive bidding and tax evasion. His clients, mainly from the oil, gas, and construction sectors, are accused of leveraging cryptocurrencies to offer bribes to public officials to secure or maintain government contracts, including those for building refineries and other significant energy infrastructures.
The prosecution alleges that these cryptocurrencies were transferred to third-party service providers, professionals, or consultants. However, it is claimed that these third parties were actually intermediaries acting for corrupt politicians, not directly related to them but often within their circle of friends. These intermediaries allegedly converted the cryptocurrencies into cash through exchanges and physically delivered the money to Brazilian politicians.
These intermediaries now face charges of aiding in bribery through money laundering. Bottini emphasized that the transactions in question, in two cases he is defending, involve sums around BRL 10 million (approximately USD 1.7 million). He pointed out that these are relatively moderate amounts in the context of Brazilian corruption, which may help them evade detection by cryptocurrency exchanges, which are currently not fully regulated under Brazilian anti-money laundering (AML) laws.
However, this might change soon. Bottini mentioned that the Brazilian Senate’s economic affairs committee recently passed a bill that would bring cryptocurrency exchanges under the scope of national AML laws. This legislation, still pending approval by the lower house and the president, would require these exchanges to implement Customer Due Diligence (CDD) and Suspicious Transaction Reporting (STR).
Bottini also highlighted ongoing efforts by Brazilian Virtual Asset Service Providers (VASPs) towards self-regulation to improve reporting of suspicious transactions, complemented by mandatory reporting requirements enforced by the Brazilian Revenue Service.
Beyond cryptocurrencies, Bottini discussed other money laundering techniques prevalent in Brazil, such as the use of fake consultancy or service contracts to launder money through non-existent services, and dólar cabo—an illegal trade of dollars intended for overseas deposit. He underscored the need for enhanced international cooperation and compliance measures to better monitor and prevent such illicit activities.
Source: https://www.internationalnewsservices.com/featured/lava-jato-pushes-money-launderers-to-adopt-more-sophisticated-ways-to-hide-dirty-cash-in-brazil