Brazilian Court Sentences 14 to $95M Bitcoin Money Laundering Operation
A Brazilian court has sentenced 14 individuals for using shell companies and Bitcoin (BTC) to launder up to 508 million reais ($95 million) in proceeds from drug trafficking.
The defendants used a maze of fake companies and cryptocurrency transactions to hide the origin of the funds.
Brazil Federal Court Sentences 14 To Jail
A federal court in Brazil has sentenced 14 individuals connected to the laundering of 508 million reais ($95 million), ending a years-long investigation into a criminal network spanning multiple states. The laundered funds were linked with international drug trafficking and other violent crimes. The group leaders were sentenced to over 21 years in prison, while their associates received sentences ranging from 8 to 17 years. The court also ordered the defendants to repay the laundered amount. Seized assets, including luxury cars and planes, were forfeited to the government.
Modus Operandi
The investigation, dubbed “Terra Fertil” by the authorities, uncovered a laundering operation using fake companies spread across two states to disguise proceeds from drug trafficking. According to federal prosecutors, the group operated a layered structure, assigning distinct roles to everyone involved. The leadership was responsible for directing the funds, while mid-level operatives masqueraded as frontmen for fake businesses. The operation also maintained an accounting arm dedicated to keeping the operation functioning through financial trickery and forged documents.
The fraudsters placed the illicit funds into the system through small bank deposits. These were layered via false corporate activity and foreign exchange operations, and integrated through the purchase of luxury goods. Prosecutors also highlighted several examples, including aircraft registered under a bikini shop and high-end real estate. Prosecutors highlighted that the fraudsters used the “ólar-cabo” system to move large amounts using cryptocurrency, with local news outlets citing the use of Bitcoin (BTC) and several other tokens. Ólar-cabo is a parallel form of institutional money transfer.
A Significant Victory For Crypto Regulation
The judgment is a major victory for regulators and strengthens the argument for robust Know Your Customer (KYC) and Anti-Money laundering (AML) frameworks at cryptocurrency exchanges. The investigation involved international cooperation and coordination, with funds being tracked across multiple jurisdictions. The investigation also proves how specialized blockchain firms can analyze public ledgers to identify patterns associated with illicit activities.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.