BVI Offshore Business: Grey Area

The New York District Attorney charged Brazilian congressman with stealing and moving millions of dollars through a Manhattan bank. These amounts are said to be placed into BVI shell companies’ and Channel Islands bank accounts.

Former governor and mayor of Sao Paulo state and municipality Paulo Maluf is alleged of having moved 140 million US dollars offshore, however the amount that can be proved at trial is defined as 11.6 million USD. Local authorities in Jersey have frozen 26 million USD.

The final cost of the public works project Avenida Agua Espraiada made 600 million USD, while initially it was estimated at  200 million. The contractors are charged of using inflated invoices and returning back, to Paulo Maluf and other defendants, 20% of their corrupt earnings. This money was passed through Safra National Bank in New York, and then transferred to bank accounts held by four British Virgin Islands companies. The New York District Attorney alleges these BVI companies - Durant International Corp., Sun Diamond Ltd., Kildare Finance Ltd. and Macdoel Investments Ltd., - to be controlled by Maluf. However, only one of these companies has been named in the indictment.

The funds layered into the BVI companies’ Jersey bank accounts were used mainly for Maluf’s personal needs, including financing political campaigns in Brazil and purchasing items at New York auction.

The full name of the main defendant is Paulo Salim Maluf, born 3 September, 1931, he is currently serving as a federal deputy on the lower house of the National Congress of Brazil. The other defendants named include also Maluf’s son, but all of them are considered to be living in Brazil, which does not extradite its citizens. For Maluf, any future international travel could result in arrest in countries which do have extradition.