Exclusive: U.S. opens probe into Brazilian oil bribery scheme – sources

The U.S. Justice Department is investigating a former U.S.-based oil trader for Brazil’s Petrobras already charged in his home country with taking part in a corruption scheme involving commodity companies Vitol SA, Glencore PLC and Trafigura AG, according to people familiar with the matter.

It was the first confirmation that U.S. investigators have joined a new phase of Brazil’s “Car Wash” corruption probe, which has toppled presidents in two countries and sent more than 130 politicians and businessmen to jail across Latin America.

The U.S. Attorney’s office for the Eastern District of New York is talking to Rodrigo Garcia Berkowitz, a Houston-based oil trader wanted on charges in Brazil for accepting millions of dollars in kickbacks for himself and others, according to one of the people familiar with the matter.

Berkowitz, 39, is cooperating with U.S. authorities in the investigation and could face charges in the United States, one of the people said, although he has not been currently charged.

Berkowitz could not be reached for comment through associates, phone or emails, and it was not immediately known what law firm was representing him.

Brazilian prosecutors said executives of the commodities companies, including some in the United States, were involved in improper payments to executives at state-run Petroleo Brasileiro SA, and that Berkowitz and others worked directly with those firms.

Vitol, Glencore, Trafigura and others collectively paid at least $31 million in bribes over a six-year period to Petrobras officials to secure advantages in deals, Brazilian prosecutors said.

The New York case signals prosecutors there are examining the U.S. arms of Vitol and others implicated by Brazilian officials, as some of those funds moved through U.S. and European banking systems.

Bribes paid to Petrobras moved through bank accounts in the United States, Britain, Sweden, Switzerland and Uruguay, Brazilian authorities have said, opening an avenue for U.S. prosecutors to probe for violations of U.S. money laundering laws.

In December, Mike Loya, the Houston-based head of Vitol’s U.S. operations, was named in Brazilian charging documents against Berkowitz and others of having full knowledge of the trading scheme. Loya has not been charged. He did not reply to requests for comment.

Assistant U.S. Attorney Mark Bini is handling the case, the people said. Reached by phone, Bini declined to comment, and a spokeswoman for the U.S. Justice Department declined to comment.

Federal prosecutors in Brazil declined on Thursday to say if they were collaborating with the U.S. Justice Department on the case.

Investigators from New York’s Eastern District office have worked hand-in-hand with Brazilian prosecutors on the Car Wash probe in the past. In late 2016, they jointly negotiated with construction firm Odebrecht that resulted in a $2.6 billion fine and access to company executives who could provide testimony about decades of bribes paid across Latin America.

Vitol, Trafigura and Glencore declined to comment on the U.S. investigation. Vitol and Glencore reiterated past statements that they are cooperating with Brazilian authorities, and Trafigura said it takes the allegations seriously. All have been suspended from business dealings with Petrobras.

Brazil issued an Interpol red notice in early December calling Berkowitz a fugitive from prosecution and requesting his detention. The U.S. Marshals office in Houston said this month it has not received a request to arrest Berkowitz.

U.S. authorities two months ago arrested Luiz Eduardo Loureiro Andrade, a Brazilian businessman, over allegations he funneled bribes to Petrobras officials from Vitol and others, according to Brazilian court documents.

Andrade, Berkowitz and nine others were charged in Brazil in December with allegations they funneled business to Vitol and other trading firms between 2011 and 2014. Andrade could not be located to request comment.

Reuters | February 7, 2019
https://www.reuters.com/article/us-brazil-corruption-petrobras-trader-ex/exclusive-u-s-opens-probe-into-brazilian-oil-bribery-scheme-sources-idUSKCN1PW2LT