In the vast majority of cases of corruption and fraud in the private sector in Brazil, the company is harmed by betrayal by its own executives.
Among dozens of major cases that I investigated involving Organizational Crime, the top ranking of fraud in the private sector is dominated by schemes Kick-back — the supplier “kicks back” part of the money received irregularly to the employee. The Portuguese word is propina. Our calculations, derived from investigative practice, are that on average a major fraud means US$ 100 million to US$ 1 billion in losses for a bank and at least US$ 10 million for a manufacturer or distributor of products.
These corporate criminal schemes never depend on a single person. On the contrary, they presuppose gang formation. In schematic terms, they imply a supplier paying bribes to have their products purchased by the company — from IT systems to legal services, from cleaning supplies to fleets or logistics contracts.
In financial companies, the scheme usually involves the granting of credit with bribes — up to 15% of the amount is returned to the bank employee who facilitated the operation — or credit recovery (the debtor “negotiates” an extremely low payment and reports to the employee). The most perverse modality is the judicial one. In it, the bank is sued and its lawyers agree to pay a large amount to the claimant, who in turn shares the “profit” with the financial institution's defenders.
In the case of products, the situation is similar. An acquisition involves everything from the area that will receive the assets to the purchasing area, including the credit analysis, registration, IT, legal for contracts and the financial sector for the release of funds.
On the other side of the counter, the company that sells goods using bribes cannot do so without counting on a handful of people. The transaction covers at least the commercial, legal, logistics and financial sectors - the latter is important, since it includes authorizations to transfer bribes in cash.
The more money is at stake, the higher the level of employees covered. With the involvement of more people, complementary crimes emerge in every major organizational crime case — from fraud and internal corruption to extortion, tax evasion, and money laundering.
This article is an adaptation of an article that was published in Valor Econômico on 11/06/2014
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