The SFO’s Largest Account Forfeiture Order

Niall Hearty of Rahman Ravelli details the Serious Fraud Office’s successful attempt to recover millions from an individual convicted in Brazil’s Operation Car Wash bribery scandal.

A London court has given the go-ahead for the Serious Fraud Office (SFO) to recover £7.3 million ($7.6 million) from an oil industry figure linked to the Brazilian corruption scandal Operation Car Wash.

District Judge Briony Clarke ruled at Westminster Magistrates Court that all the funds held by Mario Ildeu De Miranda in his account with Switzerland’s EFG Private Bank were likely to have been gained through corrupt schemes. She granted the SFO’s application for an account forfeiture order.

The £7.3 million is the largest amount ever seized by the SFO from a single bank account – the biggest account forfeiture order the agency has ever secured.

Miranda, 71, was convicted of 37 counts of money laundering in Brazil in 2019 as part of Operation Car Wash, in which Brazilian authorities uncovered extensive and systemic bribery centred around state-owned oil company Petrobras. Mr Miranda, a former executive at Petrobras, was sentenced to over six years in prison and ordered to pay $24,750,000 in Brazil.

Trial

The account forfeiture order followed a one-week trial in February where the SFO alleged that Miranda’s funds were profits from a fake consulting business he used to funnel bribes to Petrobras officials on behalf of firms looking to secure contracts with the Brazilian company.

The SFO had alleged that Miranda, who retired as an engineer at Petrobras 20 years ago, tried to disguise the source of wealth by shifting it from his consultancy’s Swiss bank account to the UK via other banks in Switzerland, the Bahamas, the United Arab Emirates, Malta and Portugal. The former engineer claimed he had only moved the money around after receiving tax advice from his lawyers.

Brazilian authorities are still investigating Miranda’s alleged role in two other corruption schemes involving Italian energy business Sapiem and French engineering company Technip.

Judge Clarke said in her written judgment that she did not accept Miranda’s claim that the money held in his UK bank account came from legitimate consultancy work. She expressed her surprise that despite all the work he had supposedly done, Miranda did not call a single witness to give evidence about that work. She also criticised his failure to produce invoices for most of the alleged work.

Significant

Although account forfeiture orders (and account freezing orders) are relatively new - having been introduced by the Criminal Finances Act 2017 - they have played a significant part in broadening the money-seizing powers of law enforcement agencies.

It is important to note that there is no requirement of a prosecution or criminal conviction in order to deploy this important financial tool. Since their implementation, we have seen a year-on-year rise in their use, as law enforcement agencies like the SFO, National Crime Agency and police forces use them to target suspected proceeds of crime.