Bitcoin sellers in Brazil are investigated for R$172 million scam

Two Bitcoin sellers from Brazil, well known by the national community, are being investigated by the Civil Police of São Paulo in the investigation that culminated in the “Exchange Operation“.

In late July, the Operation mobilized public security agents in some cities in São Paulo, including the capital, against 17 Bitcoin brokers.

According to preliminary findings by PC-SP, several companies were used as a front for a sophisticated money laundering scheme. R$ 172 million from two people and 17 companies were blocked on that date, in compliance with a court order.

The delegate who handles the case, Isa Abramavicus, informed the livecoins that the damage caused by the criminal organization may be even greater than initially estimated.

“The damage is much greater than the amounts already blocked and the group’s activities involve a larger number of cities.”

Two Bitcoin sellers from Brazil had accounts blocked and assets frozen

In the capital of São Paulo and in the city of Diadema, on July 23, Operation Exchange toured the streets to fulfill six search warrants. At the time, the assets of two people were frozen by the Brazilian justice.

But in the edition of the Justice Gazette of São Paulo this Thursday (12), the second instance, the case that runs in secrecy of justice ended up having some details publicly disclosed.

The judge responsible for the police investigation is Isadora Botti Beraldo Montezano, of the 2nd Court of Tax Crimes, Criminal Organization and Laundering of Assets and Values ​​of the Capital. The investigation investigates the Crimes of “Laundering” or Concealment of Goods, Rights or Values.

P2P sellers Dante Felipini (CEO of Makes Exchange Servicos Digitais Ltda) and Johnny Rich (founder of Brasil Digital EIRELI), are the two traders investigated by Exchange Operation, which still remains in secrecy of justice.

“Thus, the Police Authority added that, like BRASIL DIGITAL, MAKES EXCHANGE and other companies of the group consciously operate in favor of a criminal organization aimed at laundering money through cryptocurrencies.”

The company “Matutu Comercio Eletronico de Produtos de Informatica Ltda” appealed in the second instance of the court with a writ of mandamus to obtain access to the case files, since until then it had supposedly had access to only parts of the process. However, the judge did not comply with the request and gave a view to the Attorney General’s Office.

Bitcoins were seized in the operation?

The judge granted requests for search and seizure, breach of telematic confidentiality and seizure of electronic equipment of the investigated. This demonstrates that the judge allowed the police to take electronic equipment from the investigated.

As those investigated explore the cryptocurrency business, it will be no surprise if the police have learned cell phones, computers or hard wallet used in the custody of cryptocurrencies.

Exchange Operation
Exchange Operation – Credit: PCSP

However, if those investigated do not have a good backup, the funds can be safely recovered. This is possible thanks to Bitcoin technology that allows everyone to “be their own bank”. But as the case is under wraps, it is not yet possible to know if there was any seizure of cryptocurrencies.

In bank accounts, R$ 172 million of those investigated in the Exchange operation were blocked.

The order can be read in full in the São Paulo Justice Gazette on August 12, 2021.

Former candidate for mayor of Diadema

One of those investigated, Jhonny Rich, was a candidate for mayor in Diadema in the last municipal election of 2020, by the Social Liberal Party (PSL). As a campaign expense, he declared R$2,314,690.48, but only got 1,532 votes in the election.

Johnny Rich
Johnny Rich

Jhonny Rich’s defense said that this police inquiry questions 2018 information.

“This is a police inquiry initiated to investigate intermediation operations in the purchase and sale of cryptoactives, carried out in 2018, with two companies suspected of carrying out illegal acts.

Brasil Digital has already manifested itself in the aforementioned police investigation, presenting all the documentation requested by the police authorities, such as compliance analyses, invoices and other documents that demonstrate the soundness of its operations and that Brasil Digital does not comply with any type of act illicit.

It is noteworthy that Brasil Digital was not indicted in any police investigation, nor denounced by the Public Ministry and, therefore, is not a Defendant in any criminal proceeding.

Finally, Brasil Digital is available to all Brazilian authorities, as it is up to date with all its legal and tax obligations, as well as voluntarily following all the good Compliance practices applied in the traditional market, following the code of self-regulation developed by the cryptoactive market, including.”

Livecoins also sought to contact the defense of Dante Felipini, who sent a note to the story about the case.

“Makes Exchange does not condone any kind of criminal activity.
We are at the authorities’ disposal to provide any clarifications and we will express ourselves in the investigative procedure.

Sincerely, DAnte Felipini – Makes Exchange”.

What does the delegate responsible for Operation Exchange say?

Also in note to the livecoins, the delegate Isa Abramavicus responsible for the police investigation informed that more companies are being investigated, in addition to those mentioned in the order of the Diário de Justiça of São Paulo on Thursday.

“The publication refers to a writ of mandamus that was filed, in the course of the precautionary measures, in which the parties involved request access to the Records (the injunction proceeds in secrecy of justice, which is why only a lawyer, with power of attorney from the investigated party, can enable)

Not all exchanges and investigated companies are mentioned in the publication. Several others are the target of investigation, which will be disclosed later.

We are in the phase of analyzing and extracting data from the material that was seized (mobile phones, notebooks, etc.). Based on the analyzed data, we aim to establish the flow of money laundering.”