Federal court in Brazil sentences 14 people to jail for laundering more than 508 million reais ($95 million) using crypto

A federal court in Brazil sentenced 14 people to jail for laundering more than 508 million reais ($95 million) from international drug trafficking and other violent crimes. This has wrapped up years-long investigation into a sophisticated criminal network that covered several states.

The operation, dubbed Terra Fértil, uncovered a scheme that used fake companies across two different states to disguise drug profits. 

The group deliberately confused the corporate web with at least six shell companies, including Kaupan, DG Cerealista, AG Intermediações, MSS Rental, Truck Foz, and RBS Agropecuária. They had formal social purposes such as food trade or cattle breeding. However, they handled millions of dollars that were incompatible with their declared activities and were controlled by ‘fronts’ or ‘straw men’.

Crime group taps crypto for money laundering

The group’s activities extended for 5 years. They used a network of shell companies based in Uberlândia (MG) and connections in Foz do Iguaçu (PR) to conceal money from international drug trafficking and violent crimes against property, including ransom for kidnapping.

The investigation was conducted as part of Operation Fertile Land, led by the Federal Police and the Special Group for Combating Organized Crime (Gaeco) of the Federal Public Ministry in Mynas Gerais. The organization was structured with an established territorial base in Uberlândia (MG) and a presence in several Brazilian states.

They found that the laundered money was used to disguise the nature, origin, movement, and ownership of funds derived from international drug trafficking and violent crimes against property—for instance, the ransom money for a kidnapping victim in Rio de Janeiro.

Prosecutors said the criminal group had a layered structure with several roles. The leaders controlled the flow of money, and mid-level operators acted as frontmen for businesses. Lastly, an accounting arm kept the network going by using forged paperwork and financial tricks.

The occurrence of the crimes was confirmed by evidence presented to the Justice, including forensic analyzes, false accounting records, and electronic communications.

According to the sentence, the concealment methods included conducting fractional and typical banking operations, using a parallel international compensation system (cable dollar), and transferring large amounts to the crypto market. A local news outlet cites the use of Bitcoin among the cryptocurrencies being used.

Brazilian regulators charge the offenders with up to 21 years imprisonment

During the integration phase, the illegal funds were converted into high-value assets to be reintroduced into the formal economy. For instance, high-end real estate in Uberlândia, in the Triângulo Mineiro, aircraft, and high-value automobiles, in addition to the movement of other financial assets, such as VGBLs and capitalization bonds, with an aircraft even being registered in the name of a front bikini store.

The criminal conduct also involved the creation and use of false documents to support the business facade. This enabled the opening of bank accounts and the execution of unusual transactions.

The two leaders of the organization, who were discovered to be the ultimate beneficiaries of the illicit resources and directors of the laundering operations. They were each sentenced to 21 years and 1 month of imprisonment.

The eight members of the management core, who acted as ‘straw men’ or ‘fronts’, responsible for formally appearing as partners, asset holders, and financial operators, received sentences ranging from 10 to 17 years in prison.

In the accounting core that provided advisory services for the establishment and manipulation of fictitious companies, carrying out financial and asset transactions in favour of the leadership core, the three individuals received sentences ranging from 8 to 10 years in prison.

The last defendant, charged only with money laundering in aircraft transactions, was sentenced to 8 years and 10 months in prison. 

In addition to prison sentences, those involved were ordered to repair the damages caused by the criminal activity in the amount of R$ 508,646,344.08 ($95,343,213.97) through reparation and seized assets. An appeal remains an open possibility.

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