Operation Hidden Carbon, launched this Thursday, the 28th, was the largest operation to date to combat the infiltration of organized crime into the country's formal economy. According to investigations, the group controlled the fuel supply chain, including promoting adulteration of products sold to consumers, and used illicit proceeds from crime to buy existing companies. Part of this chain was captured by the First Capital Command (PCC), which used the structure to launder drug trafficking money.

The operation began with import, followed by production and distribution, and ended with the sale of the product to the end consumer at gas stations – the fuels were adulterated with the addition of a chemical product called methanol.

Criminals also used fintechs—companies that offer financial services—to inject criminal proceeds into the financial system and invest them in investment funds, purchasing more companies, real estate, and luxury goods. The goal was to shield the criminals' assets from potential investigations.

The operation was launched by the Federal Police, the São Paulo Military Police, and prosecutors from the Special Task Force to Combat Organized Crime (Gaeco) of the State and Federal Revenue Service.

Faria Lima Avenue, Brazil's main financial hub, woke up to teams executing warrants against 42 companies, brokerages, and investment funds at five different addresses. In total, 1,400 agents executed 200 search and seizure warrants against 350 targets in eight states: São Paulo, Espírito Santo, Paraná, Mato Grosso, Mato Grosso do Sul, Goiás, Rio de Janeiro, and Santa Catarina.

In addition to Operation Hidden Carbon, the criminal organization was the target of two other operations, Quasar and Tank, launched by the Federal Police in partnership only with the Federal Revenue Service.

Within the scope of the latter, the 13th Court of Curitiba ordered the arrest of 14 suspects, also accused of infiltration in the fuel sector and money laundering in Faria Lima. Six of them have already been arrested by the Federal Police.

The Federal Revenue Service estimates that the criminal organization moved R$52 billion between 2020 and 2024. Auditors detected irregularities at more than 1,000 gas stations. Most of them helped launder criminal proceeds: they received the money in cash or via card machines and transferred it to the organization's bank accounts.

The stations are located in São Paulo, Bahia, Goiás, Paraná, Rio Grande do Sul, Minas Gerais, Maranhão, Piauí, Rio de Janeiro and Tocantins.

The IRS also discovered tax evasion. It's estimated that the stations failed to collect R$8.6 billion in taxes on fuel sales. The IRS fined the companies over R$891 million.

The investigation also indicates that 10 million liters of methanol were diverted. The National Petroleum Agency (ANP) limits the presence of the chemical compound in gasoline to 0.5%, but the percentage reached 50% in commercial gasoline.

The import was carried out through the Port of Paranaguá (PR). The product was not delivered to the recipients listed on the invoices, but instead diverted and transported clandestinely by a fleet of trucks owned by the criminal organization, to be delivered to gas stations in the São Paulo metropolitan area.

The financial market and the PCC

The main target of the financial market investigation was the payments institution BK Bank. The fintech recorded at least R$17.7 billion in suspicious financial transactions. In a statement, the institution said it was surprised by the operation and that it"conducts all its activities with complete transparency, observing strict compliance standards."

BK Bank's main client during the period under investigation was the fuel distributor Aster, owned by businessman Mohamad Hussein Mourad, linked to businessman Roberto Augusto Leme da Silva, known as “Beto Louco”.

Mourad is described as the"epicenter of operations" and is believed to have assembled the criminal network with family members, associates, and professionals recruited for tax fraud, concealment of assets, and money laundering. Beto Louco is identified as the co-leader of the criminal organization.

Both were arrested in Operation Tank, but they are on the run. Their defenses have not been located. The area is open.

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According to the investigation, the group formed by Aster and Copape, a fuel company to which Mourad is also allegedly linked, has ties to operators suspected of laundering money for PCC leader Marco Willians Herbas Camacho, also known as Marcola. Camacho's lawyer denied any connection to the incidents investigated in Thursday's operation, the 28th.

According to investigators, the Copape/Aster group was owned by Mourad and Beto Louco, but directed by a “front man” called Renato Steinle de Camargo.

At this point, another financial market institution enters: Reag Investimentos, based on a street close to Faria Lima and which sponsors the Belas Artes Cinema.

Renato Camargo, the"front man," deposited R$54 million in the Location investment fund, managed by Reag. Santander notified the Coaf (National Council for the Protection of Financial Conduct) about the deposits, which, according to the bank, were incompatible with Renato's assets. An analysis of the shareholder's financial transactions revealed that R$45 million originated from an investment in an account belonging to Mourad.

Reag Investimentos informed, in a statement sent to the Securities and Exchange Commission (CVM), that it is fully cooperating with the authorities.

The Federal Revenue Service determined that the criminals used a "pocket account" opened in the name of one of the fintechs at a commercial bank. Funds from all of the fintech's clients passed through this account, with no separation between criminal and legal proceeds.

Investment funds purchased port terminal, plants and farms

The resources obtained from the diversions committed in the fuel chain entered the financial market through fintechs and were used to purchase new goods.

The Federal Revenue Service identified 40 funds with assets worth R$30 billion controlled by the criminal organization. Most of them were closed-end funds with a single shareholder, usually another investment fund. The goal was to create layers and make it difficult to trace the true owner of the money.

Revenue auditors pointed out that the funds acquired, among other assets, a port terminal, four alcohol production plants, 1,600 trucks for transporting fuel and more than 100 properties, including six farms in the interior of São Paulo, valued at R$31 million and a house in Trancoso (BA), purchased for R$13 million.

Revocation of Pix regulation facilitated the criminal group's operations

Fintechs were used by criminals because they are less regulated and monitored by authorities than traditional banks.

The superintendent of the Federal Revenue Service in São Paulo, Márcia Meng, told Estadão that the agency tried to correct the failure with a normative instruction last year, which obliged fintechs to report financial transactions, as is the case with banks.

The rule was revoked after strong pressure from the opposition, which ran a campaign accusing the Lula (PT) government of wanting to monitor and tax Brazilians' Pix transactions.

"Unfortunately, this regulatory instruction had to be reversed after a wave of fake news. Today, we don't have the visibility into what happens inside a fintech like we do into what happens in a regular bank," she said.

Meng also points out that criminals are becoming more sophisticated. Previously, shell companies were needed to move illicit funds. Another option was to send them to tax havens.

"Today, you don't need to do that; you simply open a fintech account on your phone, transfer your illegal funds into that fintech, and the fintech will then transfer these funds to investment funds. Then you can buy houses, businesses, and operate in the financial market, making the capital you acquired illicitly yield," she concluded.