Corporate Investigations and White Collar-Crime Newsletter – January 2025

The Corporate Investigations and White Collar-Crime newsletter aims to provide information on the main media news, trends, cases and legislation concerning compliance and white-collar crime matters, in Brazil and abroad. This newsletter is for informative purposes only, and should not be used for decision making. Specific legal counseling may be provided by our legal team.

Enjoy reading!

Corporate Investigations and White Collar-Crime

Importance of the chain of custody involving criminal evidence: Incomplete files cannot be used to substantiate charges

On January 08, 2024, the Fifth Chamber of the Superior Court of Justice (“STJ”) declared that the digital files used by the Public Prosecutor’s Office of São Paulo (“MPSP”) in a complaint of tax fraud against pharmaceutical companies are unacceptable, and further ordered that these digital files be excluded from the case, as well as any further evidence arising from them.

According to the findings, some of the digital files collected during the search and seizure were not obtained in full by the defense. Thus, the justices determined that the first-degree judgment can only rely on unrelated evidence to move forward with the proceeding, highlighting the importance of the chain of custody involving evidence under criminal proceedings.

Justice Ribeiro Dantas, reporting officer of the case, stated: “All the procedural agents recognize that the defense does not have access to the complete material, given that some of the files have been irretrievably lost due to an unknown error. We do not know what exactly has been lost, whether it would lead to a better clarification of the facts, or even whether it would support any of the defense’s factual lines. The state is entirely liable for such information loss. Accessing it is not possible whatsoever.”

Based on this specific case, the position established is that the state cannot validate the use of incomplete evidence to substantiate a criminal charge. This is because the loss of a portion of the digital files hinders their integrity and invalidates the use of such evidence in criminal proceedings.

Source: Incomplete files cannot be used in criminal proceedings

Legal liability of financial institutions in digital scams: Bank will refund over BRL 23,000 to scam victim

On January 20, 2025, the Court of Justice of São Paulo (“TJSP”), through the Civil and Criminal Special Court of Franco da Rocha/SP, sentenced Banco XP to pay BRL 23,854.00 in material damages to a victim of fraud on the bank’s digital platform.

According to the findings, the victim fell into a fake auction scam and carried out a Pix transfer to an account that supposedly belonged to Banco XP. Upon verifying the transaction, the account was found to be illegitimate.

Despite the arguments raised by the defense, the court verified that Banco XP had failed to adopt the appropriate safety measures, given that the internal procedures for opening the fraudulent account had not been fully complied with. Given the financial institutions’ liability to respond for damages resulting from unexpected situations involving fraud and crimes perpetrated by third parties in banking transactions, the trial reinforced that financial institutions are liable even when clients themselves have committed irregularities. 

The conviction amount corresponded to the amount transferred – inflation-adjusted from the transaction date, including legal interest from the summons date.

Source: 1003724-46.2024.8.26.0198 before the Civil and Criminal Special Judge of Franco da Rocha/SP

Deportations do not preclude criminal sentences from being ratified in Brazil

On January 21, 2025, the Superior Court of Justice (“STJ”) published a new decision regarding the approval of criminal sentences in Brazil.

The Special Court handed down that the fact that a Brazilian citizen has been deported from a foreign country does not prevent criminal sentences from being ratified so that the sentence can be served in Brazil. According to the Collegiate Board, there is no direct relationship between approving foreign decisions and deporting citizens.

According to the reporting officer, Justice Humberto Martins, the treaty governing the transfer of prisoners executed by Argentina and Brazil (Decree 3,875/1998) expressly establishes that the penalties imposed on Brazilian citizens in Argentina can be served in Brazil. In addition, ratifying the sentence served in Argentina for any imprisonment in Brazil is also acceptable, given that Article 12 of the treaty establishes that the prison sentence enforced by the state receiving the request cannot extend the confinement beyond that imposed by the original court.

In this specific case, the defendant has not yet provided sufficient evidence of the sentence served in Argentina. As a result, the defendant’s imprisonment has not been authorized. As a result, the sentence will be served entirely in Brazil.

Source: Deportation does not prevent the approval of criminal sentences in Brazil

CGU breaks record for operations and intensifies fight against corruption in 2024

In 2024, the Brazilian Office of the Comptroller General (“CGU”) carried out 47 special operations to combat corruption – a significant increase compared to the 37 operations for 2023. The operations held in 2024 have resulted in an estimated loss of over BRL 392 million, an amount similar to that of 2023, but 62% higher than that of 2022.

The CGU’s current management has focused on combining research and accountability strategies with prevention, education, transparency, integrity, and social engagement policies. This approach aims not only to suppress, but to restore and avoid mismanagement of federal public resources. Training investigative strategies, prospecting new cases, incorporating new tools, and strategically combining investigations with the auditing work have shown to be fundamental.

The 2025-2027 Integrity and Anti-Corruption Plan, published in 2024, reinforces the CGU’s commitment to combating corruption. With 49 strategic measures dedicated to fighting corruption, including integrated operations in collaboration with bodies such as the Federal Police and the Administrative Council for Economic Defense (“CADE”), the plan also encompasses preventive measures such as improving public transparency, strengthening integrity between the public and private sectors, and using advanced technology to identify and curb illicit practices.

For more information, please access the article in full.

Federal agencies saved BRL 257 million in 2024 with bid analyzing robot

Every day, more than 500 bids are published for acquiring goods and services that are necessary to implement public policies. To support public managers in preventing fraud, deviations and errors, the CGU developed the Bid, Contract and Public Notice Analyzing Robot (“ALICE”).

ALICE uses artificial intelligence to analyze planning documents for each contract, as well as bidding notices in the compras.gov.br system and others. By applying the knowledge accumulated in the CGU, ALICE generates risk alerts that can result in notice corrections, thus averting non-compliant and unnecessary expenses. In 2024, 206 preventive audits were initiated, totaling BRL 25.57 billion in audited purchases. From the audits accomplished, BRL 257.25 million was saved in several bids.

In 2024, 126 entities subscribed to receive alerts from ALICE. The project was awarded at the 29th National Treasury Award – 2024 as an innovative solution in tax management for public purchases.

For more information, please access the article in full.

Betting regulations come into force in Brazil: See changes

Brazil’s regulated fixed-odds sports betting market became operational on January 01, 2025, with 66 companies initially authorized to operate. The new regulations, established by the Secretariat of Prizes and Betting (“SPA”), include safety requirements and terms for operating in Brazil, such as the need for a head office in Brazil, the payment of a BRL 30 million grant, and the use of the “bet.br” domain. These measures aim to ensure cyber protection, financial safety, and money laundering prevention.

The regulated market requires consumers to be at least 18 years old, identify themselves using their taxpayer identification number (“CPF”), and to register through facial recognition so as to create an account on the platforms. Cash transactions, payment slips, and credit cards are prohibited. Betting payments must be carried out via electronic transfer within two hours of the end of the session. These changes increase safety and transparency in the sector, in addition to allowing bettors to access the national judicial means for solving disputes.

The regulations only impact fixed-quota sports betting, thus excluding categories such as betting lotteries. Only individuals aged at least 18 with CPF can create accounts. Access to the sites must be authenticated by password or biometrics, and confirmation is necessary every 30 minutes of inactivity. Betting websites can offer options for categories recognized by international sports entities, except for basic and non-professional competitions. These measures aim to strengthen supervision and ensure a safe environment for bettors.

For more information, please access the article in full.

CGU studies reduction in 100-year confidentiality seal on personal data

The CGU is considering a proposal to reduce the current 100-year confidentiality seal on personal information of public office holders requested via the Access to Information Act (“LAI”). The new bill suggests that only personal data bearing no public interest or that can potentially harm holders be considered confidential. In addition, the confidentiality seal period would be reduced to five years after the holder’s death. The CGU also proposes that bodies conduct a public interest test when receiving requests for access to personal data.

In September 2024, the CGU had already indicated changes in the LAI’s guidelines, thus establishing that, in the absence of an indication of a restriction period, the confidentiality seal period would drop to 15 years. In order to impose a longer period of time, the bodies must justify the decision on the basis of concrete reasons. After such period of time expires, the administration must re-evaluate the decision in the event that another request is filed. In practice, according to the CGU’s justice, Vinicius Marques de Carvalho, the confidentiality seal on personal data is now 15 years.

If approved, the bill can impact the current government, which adopted a confidentiality seal on personal data as did the previous government. The CGU expressed its intention to forward the bill to Congress in the first half of 2025. The bill aims to increase transparency and allow the public to access relevant information about people occupying public posts.

In the House of Representatives, Marcos Pollon (integrating the political party PL-MS) filed a bill also aiming to reduce the confidentiality seal period on personal data requested via LAI, however, Pollon suggests a maximum period of four years. Although both bills converge, Pollon criticized the measure as a mere “stage game“, claiming that the real intention is not to increase transparency.

For more information, please access the article in full.