Brazilian investigators cracking down on income-tax dodging and crimes against the Brazilian financial systems are focusing on Merrill Lynch, Credit Suisse, and UBS, who, they say, have violated laws which prohibit financial firms from opening accounts, making trades, or transferring money abroad, according to a Bloomberg article by Alexander Ragir and Michael Smith called “Merrill Banker Indicted With 18 in Brazil Says He’s Scapegoat.”
The Merrill employee, who was arrested and jailed by armed Brazilian agents in connection with the probe, said that those were exactly the activities that Merrill asked him to do everyday, and assured him it was legal. Internal emails from Merrill apparently corroborate that its employee was following orders from bank executives.
Brazilian prosecutors have indicted bankers from Credit Suisse, UBS and Merrill, according to the article. “Financial institutions are intimately tied to a huge currency black market in Brazil,” the federal judge in the case against the Merrill employee was quoted as saying.
“We all worked with undeclared money,” the Merrill employee was quoted as saying, adding: “More transfers meant more money coming in for Merrill;” and “There’s evidence that Merrill hastily moved client records out of Brazil in case of a police raid.” Bank executives told the Merrill employee and his colleagues not to save documents on computers, the judge reportedly wrote.
“The accusation shows the existence of a true criminal organization,” federal Judge Fausto De Sanctis, who reviewed the indictment of Credit Suisse and UBS bankers and found there was enough merit to hold a trial, wrote in a decision, according to the article.
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