A Brazilian federal court has accepted charges filed by prosecutors against banking tycoon Joseph Safra for allegedly agreeing to pay more than $4 million in bribes to tax auditors to reduce or annul fines on unpaid taxes, according to an AP report.
A court press officer said last week that acceptance of the charges means Safra and former bank executive Joao Inacio Puga are now defendants in the investigation of the alleged bribery scheme.
The Federal Prosecutor's Office alleged last month that Safra knew of a 2014 plan by executives at Banco Safra to pay 15.3 million reals ($4.25 million) in bribes. Puga negotiated the scheme, it said.
AP also reported that prosecutors have said that Safra was not directly involved in the bribery negotiations but that tapped conversations showed Puga reported to Safra on the bribery talks
After prosecutors filed charges against Safra in late March, the Safra Group said in a statement that the allegations were unfounded.
"There have not been any improprieties by any of the businesses of The Safra Group," the statement said. No Safra Group representative "offered any inducement to any public official and the Group did not receive any benefit in the judgment of the tribunal," it added.
The charges filed are a follow-up of a broader police inquiry, known as "Operation Zealots," into kickbacks by companies through lobbyists. Dozens of other Brazilian firms, including steelmaker Gerdau SA, have also been under investigation for suspected kickbacks.
The case is investigating whether companies bribed members of CARF, a body within the Finance Ministry that hears appeals on tax disputes, to get favorable rulings that reduced or waived the amounts owed. Over 70 industrial, agricultural, civil engineering and financial companies, including banks, are being probed in Operation Zealots.
The Lebanese-Brazilian billionaire, whose fortune is estimated at about $18 billion by Forbes Magazine, controls a banking and financial conglomerate that operates in 19 countries.
The Safra family moved to Brazil in 1952. In 1955, Joseph's 23-year-old brother, Edmond Safra, and his father, Jacob Safra, started working in Brazil by financing assets in São Paulo. But soon, Edmond Safra separated from his brothers Joseph and Moise and headed to New York where he founded the Republic National Bank of New York (which he later sold to HSBC in 1999 and donated most of his money to the Edmond Safra Foundation). Joseph Safra founded Banco Safra in 1955 and today it is reportedly the 6th largest private bank in Brazil. He remains the chairman of the Safra Group offering banking services throughout Europe, North and South America.
Joseph Safra acquired the remaining shares of Safra Group companies from his brother Moise Safra. The two brothers maintain a shareholding in Fibria Cellulose. He has four children: Jacob J. Safra, Esther Safra Dayan, Alberto J. Safra, David J. Safra.
His oldest son, Jacob, is responsible for all international operations outside of Brazil, including the bank in Europe, Safra National Bank of New York and real estate holdings across the U.S. His two other sons, David and Alberto, manage Banco Safra in Brazil. In 2013, Joseph Safra's family acquired more than a dozen properties in the U.S., primarily in New York City. They also own a portfolio of commercial real estate in Brazil. Joseph's brother Moise, also a billionaire, died in 2014; their brother Edmond died in 1999.
In addition to "Operation Zealots," Brazil has been gripped by the far-reaching corruption probe around state-run oil company Petroleo Brasileiro SA, known as Petrobras, and major engineering conglomerates in the past couple of years.