Tulani Ngwenya
SÃO PAULO, Brazil — A Brazilian police officer who also owned a fintech bank has been arrested in a major money laundering operation, exposing the deep infiltration of organised crime into the country’s financial sector and highlighting critical regulatory gaps. The arrest, part of “Operation Hydra,” targeted financial technology companies allegedly used by the powerful criminal organisation First Capital Command (PCC) to launder illicit funds.
Brazilian Federal Police and the São Paulo Public Prosecutor’s Office’s Special Action Group for Combating Organised Crime (GAECO) launched the operation following a plea bargain testimony from businessman Antônio Vinicius Lopes Gritzbach, who was murdered at Guarulhos International Airport last November. Gritzbach had revealed how fintechs, including 2GO Bank and Invbank, were being used to move vast sums of money for the PCC. Authorities suspect corrupt police officers were involved in his murder, which triggered further investigation.
Cyllas Salerno Elia Júnior, the arrested police officer, owned 2GO Bank. Prosecutors allege that “shell accounts were opened, and individuals with no financial capacity were used to carry out large transactions,” as stated by prosecutor Fábio Bechara of GAECO. Elia Júnior had previously been under investigation in “Operation Tai-Pan” for financial crimes involving billions of dollars and is also suspected of laundering money for Chinese businessman Tao Li, accused of tax evasion.
“What really troubles us and caused a lot of concern is the infiltration of organised crime into state structures. Without this infiltration, the PCC would not have reached the level it has today,” prosecutor Lincoln Gakiya of GAECO said at a press conference.
The investigation has brought into sharp focus the rapid growth of Brazil’s fintech sector, which now boasts over 1,500 platforms, representing nearly 58% of Latin America’s fintech industry. However, this growth has been accompanied by a lack of specific regulations, creating a fertile ground for money laundering.
Kleber Cabral, a tax auditor for Brazil’s Federal Revenue Service and vice president of the National Association of Tax Auditors (Unafisco), explained that unlike traditional banks, fintechs are not required by the Central Bank to report their financial activities to the Federal Revenue Service. “So, the country is blind to those who want to exploit this legal and regulatory loophole to commit crimes,” Cabral stated.
More from Africa News 24
Hong Kong summit targets money laundering and organised crime
Brazil’s failure to fully comply with the United Nations Convention Against Corruption (Merida Convention) further complicates the issue. A recent attempt by the Federal Revenue Service to implement a regulation requiring monitoring of financial transactions starting at BRL 5,000, including those by digital banks and fintechs, was revoked after a social media backlash.
“The Federal Revenue Service itself communicated very poorly,” Cabral noted, acknowledging the controversy surrounding the measure.
Elia Júnior’s lawyer, Márcio Sayeg, has stated that they will prove his innocence in due time. São Paulo’s Civil Police have also issued a statement, vowing to investigate the officer’s conduct and highlighting their commitment to punishing misconduct by their agents.
The “Operation Hydra” case underscores the urgent need for stricter regulations and oversight of Brazil’s burgeoning fintech sector to prevent it from becoming a conduit for organised crime.
