Gram Slattery

RIO DE JANEIRO (Reuters) – A Brazilian police investigation of alleged bribery of Petrobras employees to fix the price of fuel sold to JPMorgan Chase & Co (NYSE:) by the state-run oil firm has expanded from one deal to at least four over the course of 2011, according to documents and two law enforcement officials.

Previously unreported invoices related to fuel sale agreements between the two companies show one of the alleged intermediaries in the bribery scheme, known as Oil & Gas Venture Capital Corp (OGVC), received approximately $150,000 that year from another alleged intermediary named EGR Consultants to facilitate the purchase of roughly 826,000 barrels of fuel oil by JPMorgan, worth more than $80 million at the time.

These additional invoices represent a significant step in Brazilian police’s ongoing investigation into whether the JPMorgan 305,000 barrel deal facilitated via OGVC/EGR was a onetime or ongoing arrangement.

Reuters reported September 9th that Brazil’s federal Police are looking into whether JPMorgan paid bribes to intermediaries in exchange for fuel shipments at artificially low rates. This would be a violation of Brazilian anti-bribery laws.

The police focused on one shipment, 305,000 barrels, of Petrobras gasoline oil which JPMorgan bought in 2011, Reuters reported.

Petroleo Brasileiro SA is formally Petrobras. It stated in an email that they have “zero tolerance for fraud or corruption.” In an email, the company stated it had assisted Brazilian authorities with several corruption-related investigations.

JPMorgan refused to comment on the alleged corruption scheme.

It remains to be seen if charges will ever be filed in this probe. Reuters doesn’t have independent evidence that JPMorgan knew of the EGR payments to OGVC and the alleged bribes given to Petrobras employees.

The statute of limitations for paying or receiving bribes in Brazil depends on the severity of the crime, but can be up to 20 years and is commonly greater than 15 years, according to the nation’s federal legal code.

Police submitted a February court filing to the Federal Judge who was overseeing this probe. Investigators also attached an invoice for OGVC that was addressed to EGR (a Miami-area consulting firm). According to the invoice, OGVC was located in British Virgin Islands and received approximately $64,000 from EGR, in July 2011, for facilitating the transaction of 305,000 barrels between JPMorgan Bank and Petrobras. The invoice describes the services rendered as: “Oil products sell to JPMorgan VEC.”

Brazil’s Federal Police described EGR in court papers filed during the year 2021 as being part of a complicated web of intermediaries which helped to funnel bribes from fuel buyers including JPMorgan throughout the course 2011.

Police claim that EGR transferred some payments to OGVC in those documents. The documents reveal that police believe that OGVC took a cut and passed part of the payments to Petrobras traders.

Rafael de Piro, a lawyer representing OGVC denied any business dealings between the company and JPMorgan.

EGR’s representative did not reply to several text messages or an email by Reuters. The representative had previously declined to comment on the matter when asked about authorities’ allegations regarding the company’s conduct in September.

The court papers, which contain witness testimony, dozens of pages and correspondence dating back 18 months between alleged coconspirators and police documents, allege that OGVC transferred part of this payment to Petrobras employees, who assisted in the allegedly unlawful deal. It’s not clear if OGVC allegedly paid Petrobras traders through additional intermediaries or directly.

Reuters has reviewed three additional invoices from OGVC’s account at Swiss private bank Landolt & Cie, showing that the firm received three additional payments from EGR for facilitating fuel purchases by JPMorgan over the course of 2011.

The Washington-based International Consortium of Investigative Journalists (ICIJ) shared the invoices with Reuters as part of a trove of documents it provided, after the news agency asked the ICIJ if it held any documents relating to OGVC’s Landolt account in Switzerland. First invoice was issued on June 8, 2011. That year, the last invoice was dated September 14, 2011.

According to two Brazilian federal law enforcement officers, Swiss authorities turned the documents Reuters saw over to Brazilian investigators. Brazil’s federal police didn’t respond to our request for comment.

Although the Office of the Attorney General of Switzerland confirmed via email that documents relating to OGVC were handed to Brazilian law enforcement officers, it declined to comment on the contents of the documents.

JPMorgan did not comment on these deals. Petrobras refused to comment but claimed that criminals from its trading division had used elaborate tactics to conceal wrongdoing. This made it very difficult for Petrobras to eradicate them without law enforcement.

“It’s important to highlight that the authorities investigating the case have shown that the criminal organization responsible for the illicit acts in question used methods that kept them from being detected. These methods could only be brought to light with investigative resources that only the authorities possess,” the company wrote in an e-mail.

De Piro, OGVC’s lawyer, did not comment on the content of the invoices.

Financial services company ODDO BHF, which earlier this year purchased Landolt & Cie – the bank where the records seen by Reuters were kept – did not respond to a request for comment.