Brazilian asset manager Daniel Dantas has been arrested on charges of leading a criminal organisation which committed crimes including money laundering, tax evasion and racketeering to embezzle public funds.
According to police, the arrest was part of a broader operation that also saw investor Naji Nahas and former Sao Paulo mayor Celso Pitta arrested. Brazilian police mobilised 300 officers to carry out 24 arrest warrants and 56 search warrants during the operation.
Nahas and Pitta are allegedly involved in the organisation led by Dantas. Nahas is additionally accused of running a separate money laundering operation.
The charges against Dantas, who founded Brazilian fund management firm Opportunity Asset Management in 1994, are the result of a criminal investigation that stemmed from the congressional bribery scheme, or mensalão (big monthly payment) scandal, in 2005, which at the time threatened to bring down the government of Brazilian president Luiz Inácio Lula da Silva.
Opportunity has been involved in high profile deals including the formation of Brasil Telecom, as part of the privatisation of the Telebras state telephone monopoly. In 1997, the firm created the CVC/Opportunity Fund in a joint venture with Citigroup’s Citicorp Venture Capital. The private equity fund became the largest raised in Brazil at that time with $728 million under management.
However in March 2005, Citigroup fired Dantas as manager of the CVC/Opportunity Fund citing mismanagement and after becoming embroiled in a string of legal conflicts with Citigroup, Opportunity employees, limited partners and co-investment partners.
Police and federal prosecutors in Sao Paulo allege that Dantas used the Cayman Islands-based CVC/Opportunity Fund as well as fictitious companies, to launder money and thwart tax collectors.
According to a report by Bloomberg, Nelio Machado, Dantas's lawyer, told a press conference that Dantas didn't do anything wrong. The lawyer said he didn't know what his client was being accused of. “My client's arrest is illegal and unnecessary.”
Opportunity currently manages approximately R18 billion ($11.2 billion; €7.1 billion) across 12 funds.