Brazil police arrest another former Petrobras exec in probe

SAO PAULO, (Reuters) – Brazilian police arrested Jorge Zelada, former director of Petrobras’ international division, as part of an ongoing investigation into bribery and corruption at the state-run oil producer, prosecutors said yesterday.

Zelada is suspected of money-laundering, appropriating public funds, corruption, tax evasion and contract fraud. He was taken into custody early yesterday as part of the graft probe that has already ensnared dozens of Brazil’s top executives.

“This step concludes the analysis of Petrobras’ principal directorships,” Brazilian Federal prosecutor Carlos Fernando dos Santos Lima said at a press conference yesterday.

He added that “there is still much to be investigated (at the company).”

Prosecutors said Zelada, who led the international division from 2008 to 2012, was suspected of receiving bribes on a contract for the Titanium Explorer drillship operated by Vantage Drilling Company and another rig operated by Pride International, a company acquired by Ensco PLC in 2011.

A call and e-mail early yesterday to Vantage’s office in Houston went unanswered. Efforts to reach press representatives at Ensco were unsuccessful.

Lima told Reuters last week the investigation had turned up evidence of corruption by more than a dozen foreign firms, but Vantage is the first known U.S. firm mentioned in the case.

According to a police statement, the 15th phase of the Petrobras investigation, dubbed “The Monaco Connection,” led to search and seize warrants for three other suspects, though none were named.

Zelada is suspected of hiding some 11 million euros received through bribes in Monaco, prosecutors said in a statement.

His lawyer Eduardo Moraes said the arrest was unnecessary and illegal and that he would ask for habeas corpus. Zelada has not been formally charged and federal judge Sergio Moro justified his preventive decision by saying there was a risk of additional money laundering involving overseas accounts.

He is the fifth ex-Petrobras executive implicated in the 16- month old investigation and the fourth to be arrested. Another former head of the international division, Nestor Cervero, was sentenced May 26 to five years in prison for money laundering.

Lima said he expects to end the year with about 1 billion reais ($321.5 million) in funds returned to Petrobras, which prosecutors say was a victim of the corruption scheme.

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