The Swiss attorney general issued an order this week to freeze $400 million of assets allegedly tied to a corruption scheme at Brazil’s Petrobras.
The Office of the Attorney General of Switzerland (OAG) said Wednesday it has released $120 million of the frozen assets for repatriation after reaching an agreement with two account holders.
“The release of over $120 million reflects Switzerland’s clear intention to take a stand against the misuse of its financial center for criminal purposes and to return funds of criminal origin to their rightful owners,” the OAG said.
The attorney general has opened nine investigations into alleged money laundering tied to Petrobras since April 2014 involving eight Brazilian citizens and one person who has yet to be identified.
The OAG has received about 60 reports flagging “suspicious transactions” from the Money Laundering Reporting Office that may also be connected to corruption at Petrobras.
The OAG said its probe has uncovered over 300 accounts at over 30 Swiss banks that were “apparently used to process the bribery payments under investigation in Brazil.”
The accounts are owned by senior executives at Petrobras and the company’s suppliers, financial intermediaries and Brazilian and other foreign companies that have either directly or indirectly paid bribes, the attorney general said.
“The Brazilian bribery scandal affects Switzerland’s financial center and its anti-money-laundering strategy, with result that the OAG has a close interest in contributing fully to the resolution of the scandal through its own investigations,” the OAG said.
Swiss criminal proceedings into the case are ongoing.
Last week the Financial Times reported that former Petrobras executive Pedro Barusco admitted to using Swiss bank accounts in a bribery scheme at the company.
Barusco told Brazilian officials he opened a number of accounts at different banks including an account at HSBC he shared with his wife.
The Swiss investigation is part of an international probe into alleged graft at Petrobras that has already landed three former executives in jail.
Brazilian police launched operation Lava Jato (“Car Wash”) last March to investigate suspected corruption involving Petorbras officials.
Former Petrobras downstream chief Paulo Roberto Costa was arrested later that month for allegedly participating in a $3.96 billion money laundering scheme.
Costa later admitted to taking a $636,000 bribe in connection with the company’s 2006 purchase of a Texas refinery and said that company officials skimmed as much as 3 percent off contracts.
Costa claims the funds were used for illegal political campaign financing, including campaigns run by transport chief and politician Sergio Machado.
Machado has denied any wrongdoing.
In November Petrobras issued the first of three delays for its third quarter results after PricewaterhouseCooper refused to sign off on accounts tied to Machado.
Later that month Brazil’s central bank froze about $18.6 billion in assets belonging to suspected participants in corruption schemes tied to deals made by Petrobras.
Shortly after the central bank’s action the company was served with a subpoena from the U.S. Securities and Exchange Commission.
The SEC has not commented on the matter.
Petrobras, already the most indebted oil company in the world, saw its investment ratings downgraded to junk by Moody’s in February due to “increasing concern about corruption investigations and liquidity pressures.”
In early February former Petrobras CEO Maria das Graças Foster resigned her post along with five other executives after the company refused to take write downs tied to alleged corruption in its unaudited third quarter results.
The company’s board named Banco do Brasil chief Aldemir Bendine its new CEO, a controversial decision given Bendine’s lack of experience in the energy industry.
Brazilian prosecutors have also filed five federal lawsuits against six construction companies for $1.55 billion in damages tied to alleged corruption.