Deutsche Bank is expected to deposit the proceeds from the
settlement within the next 60 days, Silvio Marques, a prosecutor in
the case, said in a phone interview. Marques said that more than
$200 million from a scheme allegedly run by former mayor Paulo Maluf
and other officials moved freely within Deutsche Bank accounts.
Efforts to reach Maluf's lawyers for comment were unsuccessful.
Courts in Brazil and the island of Jersey have found Maluf,
currently a lower house lawmaker, guilty for several charges, while
other lawsuits related to corruption allegations while he was mayor
of São Paulo between 1993 and 1996 are still under analysis. Maluf
has repeatedly denied any wrongdoing.
The settlement will likely add pressure on UBS AG <UBSN.VX>, Safra
National Bank of New York <SNBNY.UL> and Citigroup Inc <C.N> to pay
compensation for similar allegations, Marques said. The banks may
have to pay between $60 million and $70 million to settle
allegations they also took on deposits and wired money from the
scheme, he added.
"Deutsche Bank is pleased to have resolved this matter after
cooperating fully with authorities in their investigation,"
according to a statement by the Frankfurt-based bank.
Press officials for Citigroup, Safra, and UBS in Brazil could not be
contacted after working hours.
Corruption is somewhat of an endemic problem in Brazil, costing the
economy as much as 3 percent of gross domestic product a year,
according to several analysts. In recent months, justices at the
Brazilian Federal Supreme Court issued rulings on a cash-for-votes
case involving the political party of President Dilma Rousseff,
which resulted in numerous convictions for fraud and vote buying.
[to top of second column]
Maluf took bribes and kickbacks when commissioning public work
projects while at the helm of the city, a Jersey-based court ruled
late in 2012. Despite a flurry of scandals surrounding Maluf since
at least 1981, he is still a popular politician in his stronghold of
According to Marques, more than 2 billion reais ($858 million) in
assets controlled by two companies controlled by Maluf's sons are
frozen. Of the about $340 million thought to have been embezzled by
the scheme, only $6 million have returned to the country, Marques
($1 = 2.32 Brazilian reais)
(Reporting by Guillermo Parra-Bernal;
editing by Bernard Orr)
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