Major companies cited in São Paulo tax-credit corruption probe

São Paulo state prosecutors launched a new phase of Operation Icarus on Thursday (Sept. 3), targeting an alleged scheme involving retailers, manufacturers and service providers that illegally expedited the release of tax credits at the State Finance Department.

Documents obtained by Valor show that cash-and-carry food retailer Assaí, furniture, appliances and electronics retailer Casas Bahia, supermarket chain Dia and pharmacy chain Farma Conde are cited in the ongoing investigation. Prosecutors are examining allegations that bribes equivalent to 1% to 2.5% of the tax credits involved were paid through a retained lawyer, with the percentage varying by company.

Rumo, which operates in rail transportation and logistics, energy conglomerate Cosan, natural gas distributor Comgás, fuel distribution company Ipiranga, beverage group Ambev and Sony Mobile (electronics and mobile devices) are also mentioned as alleged beneficiaries of the scheme, which accelerated the release of credits related to ICMS-ST, the tax-substitution regime for São Paulo’s state tax on the circulation of goods and services (ICMS). Prosecutors are also investigating whether some companies paid to fabricate tax credits that did not exist.

Those companies were not directly targeted in Thursday’s operation. But an investigation is underway involving information from a plea-bargain agreement and access to public officials’ bank records, and prosecutors have been gathering additional information about the groups.

Operation Icarus is investigating an alleged scheme involving the fraudulent creation and release of billions of reais in ICMS tax credits in São Paulo state. The investigation began more than a year ago with pharmacy chain Ultrafarma and electronics and appliance retailer Fast Shop retail chains.

Law firm involvement

Most of the companies allegedly retained law firm Buttini de Moraes, which then arranged bribe payments to secure the release of tax credits in recent years, according to a São Paulo Public Prosecutor’s Office (MPSP) search-and-seizure filing obtained by Valor.

The law firm allegedly made cash payments in shopping-mall parking lots in São Paulo, with the money placed in archive boxes, as Valor’s website reported Thursday. The companies deny wrongdoing and say they were unaware of the investigation.

Thursday’s action included requests for the arrest of André Weiss, former executive director-general of tax administration at the State Finance Department, who held the position until May, and lawyer João André Buttini de Moraes, a partner at Buttini de Moraes, founded in 2018 and a central figure in the investigation involving the retailers.

Prosecutors believe Buttini handled most of the contracts under scrutiny to facilitate access to ICMS-ST credits that had been stalled at the Finance Department. The groups needed access to those credits to monetize them and remove them from their balance sheets, or to sell them to third parties.

The new phase of Operation Icarus involved the execution of 47 search-and-seizure warrants at homes, offices and businesses in the city of São Paulo, the metropolitan area, the state’s interior and Mato Grosso do Sul.

The court order also temporarily removed six suspects from public office, barred the 27 targets from contacting one another, required them to surrender their passports and prohibited them from leaving the country. Investigators are examining possible crimes involving a criminal organization, the offering and receiving of bribes, and money laundering.

The operation was carried out by the MPSP’s Special Action Group to Combat Cartels and Money Laundering (GEDEC).

“Investigators allege that the group turned a legitimate tax mechanism into an underground market in which not only taxpayers’ credits were traded, but also the administrative acts required for their recognition and release,” the MPSP said in a statement. “The improper payments allegedly corresponded to percentages of the tax credits, ranging from 1% to 10% in the cases under investigation.”

Assaí payments

Assaí appears in the investigation into alleged bribe payments intended to unblock, accelerate and approve ICMS-ST refund claims.

The retailer allegedly paid nearly R$53 million to lawyer João Buttini’s company BM Tax to obtain faster release of the credits, Valor found based on documents from the search-and-seizure filing.

The investigation also provides further details involving Casas Bahia and supermarket chain Dia. At all three companies — Casas Bahia, Dia and Assaí — the alleged bribes paid by Buttini ranged from 1% to 2.5% of the value of the tax credits.

The proceedings identified so far by the MPSP involve about R$800 million in Assaí credits under centralization procedures and R$97.7 million in two Dia cases cited in notes seized at the home of Paulo Siqueira Prado, a cooperating witness who has become a central figure in the investigation. Prado is a former regional tax chief at the Butantã tax office in São Paulo.

Prado provided information underpinning Thursday morning’s searches and the allegations involving the retail chains. He also said in his cooperation agreement that Buttini personally approached him at the Finance Department in 2023 to discuss the interests of taxpayer clients represented by his law firm.

Recordings of a 2023 lunch involving public officials described as operators of the alleged fraud scheme also include updates on tax-credit proceedings and references to the retailers.

Recorded conversation

Prosecutors are also investigating whether some companies paid to create fictitious tax credits that did not exist.

A recording of a lunch among public officials on July 27, 2023, was found on the cellphone of Artur da Silva Neto, the former head of the Finance Department’s tax division, who has since been removed from his position and arrested.

Those at the table included Silva Neto, cooperating witness Paulo Prado, André Weiss, a former directorf tax inspection, as well as a tax-inspection supervisor, an inspector from the Butantã tax office and a tax auditor.

At one point, the participants discuss the centralization of three major taxpayers and mention Via Varejo, now Casas Bahia, Dia and Sendas, or Assaí.

In the conversation, Silva Neto, whom investigators regard as the mastermind of the scheme within the Finance Department, asks Weiss which projects had begun with the chains. Prado then says one involved Via, or Casas Bahia, while work with Dia had “not even started yet.”

The tax supervisor then says that “a third one that is centralized there is Sendas.” Silva Neto responds that Sendas is the trade name and that “there’s an Assaí” — with the two referring to the same company.

“So I think we can sit down, check it and work it out,” Weiss says. Lawyers for Weiss, Prado and Silva Neto did not comment.

Alleged kickbacks

The MPSP’s ongoing investigation, based on documents gathered by prosecutors and Prado’s cooperation agreement, also says the cooperating witness told investigators he received from Buttini his share of an improper payment connected with services provided to Assaí.

“The payment was made through the issuance of 12 invoices to [poultry and food producer] Ad’oro S.A., simulating the provision of services by his company to that company,” the MPSP said in the court filing.

Investigators believe Ad’oro S.A. served as Assaí’s payment vehicle in its dealings with the law firm. Payments allegedly went from Ad’oro to BM Tax, which received R$37.5 million of the R$52.9 million Assaí paid in legal fees.

BM Tax’s revenue rose from R$5.5 million in 2019 to R$70.4 million in 2023.

The investigation also includes WhatsApp messages between a tax auditor and Prado referring to Assaí. In one June 2023 exchange included in the search-and-seizure filing, the auditor tells Prado that Buttini had sent him the filing for Assaí’s roughly R$800 million refund claim, which had been centralized under another auditor’s CNPJ registration.

Buttini allegedly asked that the case “stay in your NF,” or tax-audit unit, because they had already established “a good methodology with the team.”

MPSP documents also say public officials agreed among themselves on the bribes after ICMS credits were released.

“The setting of the bribe as a percentage of the amount to be refunded — 1% in Assaí’s case, 1.5% in the Via and Dia cases, 2.5% in the case of beverage distributor Metrópole, 3% as the lawyer’s share and 10% in the demand originating from the tax-substitution supervision unit,” prosecutors said in the filing.

“[This] is not an incidental detail: it demonstrates that the official act had a price,” the filing says.

Payment records

Based on a cross-check of 88,388 payment entries from 2018 through 2025, Buttini’s firm received R$140.6 million in service payments from Assaí, Via, Ipiranga and Metrópole, according to data in the court filing.

Assaí was the largest payer, at R$52.9 million, followed by Casas Bahia, with R$49.8 million of the R$140.6 million total.

In a statement, Assaí said it hired Buttini Moraes and BM Tax to provide tax and technology services because of the scale and complexity involved in processing tax data.

“The scope of the services included the processing of massive tax databases, the preparation of calculation records, the preparation of digital files required under the law and the regular administrative monitoring of the corresponding requests,” the company said.

Assaí also said it made no payments to public officials and neither requested nor authorized the offer of any improper advantage.

The company said ICMS-ST refunds are not a tax benefit, incentive or favor, but a right established by law and applicable when the tax is collected in advance. Assaí also said it had not been notified by authorities and had not been the target of any court measure or investigative action related to the operation.

Dia said it had not been contacted or notified by the MPSP and “does not condone any illegal practice or conduct that violates the law or its ethical principles”. The company said it acts with “integrity and transparency” and remains available to cooperate with authorities.

Casas Bahia did not comment.

In a statement, Buttini de Moraes’s defense said it was reviewing the investigation and the circumstances that led to the operation. It said that, “in full transparency and cooperation,” it would provide all necessary clarifications to the relevant authorities as soon as it had full access to the case files.

*By Adriana Mattos — São Paulo

Source: Valor International

https://valorinternational.globo.com/