Brazil Probes Possible Obstruction of State-run Pensions Fraud Case

Brazilian federal police carried out search and arrest warrants on Wednesday to investigate the suspected bribery of witnesses in a corruption probe involving pension funds of state-controlled companies.

Authorities said the operation targeted Mário Celso Lopes and his son Mário Celso Lincoln Lopes, partners at pulp company Eucalipto Brasil SA, following evidence that a 190 million-real ($60.9 million) eucalyptus wood supply contract was used to buy the silence of a witness.

The arrest order against the senior Lopes was based on evidence that recent actions, including the signing of the supply contract, obstructed the investigation, prosecutors said, referring to an agreement between Lopes’ company and Eldorado Brasil Celulose SA.

Efforts to reach Eucalipto Brasil SA for comment were not immediately successful. Two of phone numbers listed on the company’s website appeared to be nonworking, and the company did not immediately respond to written messages.

Eldorado is a subsidiary of the Batista family’s holding company J&F Investimentos SA, which also owns the world’s largest meatpacker, JBS.

In an email, J&F said none of its companies were targeted by the police raids on Wednesday. Its lawyers are handling J&F’s defense in the pension fund fraud case, J&F added.

The probe, dubbed Operation Greenfield, is investigating alleged fraud in connection with state-controlled pension funds’ investments in FIP Florestal, which is partly owned by J&F Investimentos.

Mário Celso Lopes was one of the founding partners of FIP Florestal, in which state-controlled pension funds Petros and Funcef hold a minority stake.

Petros and Funcef invested 550 million reais in the venture between 2009 and 2010, the prosecutor said.

The Greenfield probe is one of a string of investigations into alleged corruption at major Brazilian companies and illicit activities involving private and state-run firms.

In February, federal prosecutors asked a court to block assets of two key suspects in the probe. They said defendants Joesley Batista, a member of the family that controls JBS, and José Carlos Grubisich Filho, chief executive officer of pulp producer Eldorado Brasil, breached an agreement related to the


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