Corrupt Brazilian mayor’s $8m fortune stashed in Jersey ‘handed back to São Paulo’

Corrupt Brazilian mayor’s $8m fortune stashed in Jersey ‘handed back to São Paulo’

In 2012 Paulo Maluf, who was in office from 1993 until 1996, was found by the Royal Court to have used two British Virgin Island-based companies – Durant and Kildare – to launder money into a Jersey-based Deutsche Bank account.

The BVI companies were subsequently ordered to pay back to the city $10.5 million, along with $17.8 million in interest.

The judgment was the result of the first asset-recovery case Brazilian prosecutors have pursued outside Brazil.

However, it is thought that, in total, the corrupt mayor took $344 million in bribes and kickbacks during his tenure. Prosecutors claim there is still up to $230 million to be recovered.

In December 2017, Maluf began serving a sentence of seven years and nine months for money laundering. Despite initially being taken to prison, Maluf, who is now in his 80s, was transferred to house arrest on humanitarian grounds after suffering heart and back problems while in jail.

One project that Maluf was alleged to have been involved in was a major construction project to build a motorway across the city. It was estimated that it would cost $180 million to complete but ended up costing $600 million, making it the most expensive road in the world at the time.

Speaking to Brazilian media organisation UOL, prosecutor Silvio Marques claimed that his office had so far been able to recover $120 million.

He added that the recently returned $8 million ‘is a small part of the total movement in Jersey’.

‘When he was mayor of São Paulo, Paulo Maluf started to divert money from works on Avenida Água Espraiada [the São Paulo road project] and the Ayrton Senna Tunnel. This money was paid by the construction companies contracted for the execution of these two works.

‘Much of it was sent…to the United States, England and France. At a certain point, around 1995, a large part of the total diverted was sent to Jersey and there the funds were deposited in the name of three offshore companies, which had their headquarters in the British Virgin Islands.’

Maluf’s lawyers claim that their client never held any accounts in Jersey.

The Law Officers’ Department were contacted for comment but said they were ‘unable to comment at present.’

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