Former downstream head Paulo Roberto Costa. Image courtesy of Geraldo Magela/Agência Senado.

Brazilian police arrested 18 people Friday including a former engineering director as part of a corruption probe into state owned Petrobras.

More than 300 police and 50 tax officials raided offices across five states in Brazil including the offices of construction and engineering firms Oldebrechtand and Mendes Junior, BBC said.

Documents were taken from the offices and 18 people suspected of being involved in bribery, money laundering and kickback schemes tied to Petrobras contracts were arrested.

Former engineering director Renato Duque was among those taken into police custody.

No formal charges have been filed.

Duque is the second senior Petobras executive to be arrested in the corruption investigation.

Police are investigating allegations that Petrobras employees skimmed billions of dollars off deals, with some of the funds allegedly landing in politician’s coffers.

Former downstream head Paulo Roberto Costa is awaiting trial for allegedly participating in a $3.96 billion money laundering scheme and admitted to taking a $636,000 bribe in connection with the company’s 2006 purchase of a Texas refinery.

Costa claims funds from Petrobras deals were used for illegal political campaign financing, including campaigns run by transport chief and politician Sergio Machado.

Machado has denied the allegations.

Petobras had to delay its third quarter results for the second time last Friday due to ongoing police and internal investigations into alleged corruption.

Third quarter results are now expected to be released on December 12.

Analysts have warned the scandal could strip the company of its investment grade rating.

Last week, Brazil’s national accounting agency said Petrobras may have overpaid by as much as $1.2 billion in transactions that are being investigated for possible kickbacks including the company’s purchase of a Pasadena, Texas refinery.


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