(Bloomberg) — With a soothing score and the big board of Latin America’s biggest stock exchange blinking in the background, the online advertisement by 4TBank promises to reduce economic inequality by making financial markets more accessible. Driving home the message, the camera follows Matie Obam, the chief executive officer of Brazil’s “first CryptoBank,” as she touts the company’s mission while strolling through São Paulo’s financial district.
“We came to eliminate abusive fees that are suffocating us,” Obam, now 24, says in that 2021 video. “We were born to help you.”
Brazilian authorities say they uncovered something far more nefarious. Police say the company scrubbed hundreds of millions of dollars worth of dirty money for Brazil’s most notorious drug gang — First Capital Command, or PCC — and funneled cash into political campaigns. The alleged scheme was dismantled in August, just two months before voters headed to polls for municipal elections, setting off fresh worries about organized crime’s abilities to infiltrate the top levels of Brazilian society.
Authorities have long pursued the PCC, which operates a narcotics-trafficking ring stretching across five continents. Despite efforts to stop its spread and US sanctions, the gang has managed to evolve over three decades from a jailhouse crew of São Paulo crooks and thugs into a multi-billion dollar criminal enterprise, with some 40,000 “baptized” members and domination over a key cocaine corridor to Europe. To clean its ill-gotten gains, investigators say the organization’s brass is now setting its sights on Brazil’s financial sector and digital marketplaces, including cryptocurrency and online sports-betting platforms as well as its booming fintech industry.
“Far better than finding a bank or a front to launder your money is creating your own bank,” said Lincoln Gakiya, a prosecutor with São Paulo’s Gaeco, the state’s organized crime task force, who estimates the PCC earns $1 billion a year just from drug trafficking.
In all, authorities have requested permission from a judge to freeze over 8.6 billion reais, or nearly $1.5 billion, in assets belonging to 4TBank and its associates, according to investigation documents seen by Bloomberg News. The amount left Fabricio Intelizano of São Paulo state’s civil police, the lead investigator in the case, dumbfounded.
“I had to add it up three times to make sure it was correct,” he said in an interview. “I did it first in an Excel spreadsheet and then on a calculator because I didn’t believe what I was seeing.”
A legal representative for 4TBank said that the money and the transactions are not related to the PCC, “are not related to drug trafficking, arms trafficking, or any other illicit activity wrongly attributed to the payment institution.”
Just weeks after the raid, authorities took down two more allegedly illegal fintechs operating in São Paulo. Police say these unregistered companies conducted transactions worth over $1 billion, and suspect tens of millions of that were tied to organized crime groups and the PCC. Other investigations have also revealed that the organization has poured its money into construction companies,
