Anti-Corruption Watch

A Convicted Criminal's Guide to Curbing Corruption in Brazil

The leader of an illegal money-moving scheme tells all in an exclusive interview with AQ.
Dado Galdieri

This article is adapted from AQ’s latest issue on Latin America's anti-corruption movement Ler em português

This article was updated to correct the number of months interviewee was behind bars.

RIO DE JANEIRO - “A life in crime is not as easy as people think.”

For three decades Vinicius Claret worked hard — as a black-market foreign exchange dealer, or doleiro, involved in two of Brazil’s most notorious corruption schemes of recent years. Identified by a former client who got caught in the Lava Jato investigation, Claret was arrested in 2017 by Interpol in Uruguay, where he had relocated after authorities seemed close to uncovering his role in another scandal known as Banestado.

Claret served 14 months behind bars and is now on probation after cutting a plea bargain. The terms obliged him to not only wear an ankle bracelet, but to teach classes to law enforcement officials and others on how illegal foreign currency schemes work.

According to the Public Ministry, at its peak, his group used 3,000 offshore companies in 52 countries to avoid detection. He said they moved billions of dollars and were only caught because his former client cut a plea bargain. “To this day there is no material proof of what we did — just what we ourselves decided to hand in to authorities.”

Claret, now 58, agreed to sit down with AQ at his lawyer’s office in downtown Rio de Janeiro. A tall and athletic man, who once hoped to become an underwater videographer, Claret described in straightforward terms how he drifted into criminality and how his schemes worked. His story shows how government policies, such as Brazil’s cash controls of the 1980s and 1990s, can have unintended consequences — and how new technologies such as Bitcoin are being incorporated into financial crimes.

This interview has been translated and edited for length and clarity.

AQ: How did you get started as a doleiro?

Vinicius Claret: I always wanted to work in finance. My dad worked in a bank and would take me with him sometimes. I really liked it. I studied accounting and got a job at a bank where I did a bit of everything: back office, credit department. In the mid-80s I was promoted to manager and transferred to a branch in Ipanema and that is where I started buying dollars under the table, to serve a client. The (Brazilian government) policy then was that people traveling could only buy $1,000 in traveler checks. No one can travel with only $1,000! So clients would ask me to find them some more dollars in cash. I found a guy who would deliver to the branch and that is how I started.

AQ: But you were a bank employee — this was a “side” business?

VC: I’d get a commission, but word got around. It was “talk to Vinicius.” Then this company offering tourism packages and foreign exchange moved across the street. I was giving them so much business they decided to hire me. This was 1987. It was normal in Brazil: Everyone who had any money left over would buy dollars, all over the country. Our clients were executives, entrepreneurs of every area, artists. Inflation reached some 80% in the late 80s, buying dollars was a way to keep your money, it was a savings tool. It was something that was normal, until it wasn’t. But by then you start finding excuses to stay in the business. I stopped in 2015, right after Lava Jato started. Our business shrank by almost 90% then.

AQ: When did your business become a money laundering operation?

VC: We didn’t clean any money. It stayed dirty. To launder you’d need to do something legal with it. We didn’t offer that service.

After inflation came down in the 90s, and the exchange rate became more stable, but still high, the dollar market became a tool for tax evasion serving importers and construction companies, one buying and one selling. Today I am not sure how it is working because the construction companies are out, but the importers are still here, so where are they buying dollars? I can only see one way. I can’t disclose it because of my deal with the prosecutors, but there are ways of doing things. And they were our competitors in the past.

AQ: What can curb this flow?

VC: We need to do away with this mystique around foreign currency. The more we (regulate) this in our economy the more control we’ll have. People say, ‘Oh, you have dollars!’ like it is something supernatural. It was always murky, hidden — and this myth worked in (doleiros’) favor.

Most people don’t understand the exchange market, which in (most) other countries is super-normal. Even the authorities don’t understand it. We have shown them our accounting system, and they still don’t know what we are talking about! Some have attended our talks more than once. People should be able to have accounts in dollars (within Brazilian banks) and it should be a transparent market. I’ve seen some changes already. I read the news and I see that some rules have changed.

But now there is another issue, this Bitcoin, and this is completely absurd. A currency that doesn’t need to be declared is completely absurd.

AQ: What do you tell authorities they need to do?

VC: The most important thing to fight money laundering is taking cash out of circulation — get people to use banks. If you do something wrong but there is no cash involved, there is a trail to follow. With fintechs today you can make this happen, even in a big country like Brazil. And they should do a (public awareness) campaign too because the population needs to know they can’t just sign blank checks. You don’t know where that check will end, maybe a drug dealer? We would get mountains of small-amount checks that could never be traced. One or two thousand checks every day, can you imagine?

AQ: But your operation used bank transfers as well, not only cash. What was missing for authorities to find you?

VC: A lot of people just stopped doing compliance. It shouldn’t be possible for (a person with financial or personal ties to political figures) to get a bank account abroad. This isn’t me talking, (Justice Minister) Sérgio Moro said it, that the Petrobras’ guys had accounts abroad and Odebrecht paid them directly.

And what about a caixa 2 (off-the-books income) account? A person opens an account, moves millions and you don’t check? Compliance is good only if followed. I heard people say that they gave money to auditors to get things approved. If the auditor can be bought, then you already have a hole. These banks we worked with didn’t do their compliance, or if they did, did it badly. The only way to prevent this is if the banks are punished, fined. The worst thing on earth for a banker is a loss, they feel like an athlete who lost a fight or a game.

But punishment may not be as important as finding solutions to the underlying problems. Everyone talks about money laundering, tax evasion. But for many people who evade taxes or under-declare imports, they do that because taxes are high — and without (cheating), they can’t survive.

ABOUT THE AUTHOR

Cecilia Tornaghi is the managing editor of Americas Quarterly. A Brazilian-American journalist, she has been covering Latin America for the last 20 years with a focus on policy, business and economics. 

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Any opinions expressed in this piece do not necessarily reflect those of Americas Quarterly or its publishers.
Tags: Brazil, graft, doleiro, corruption, criminality


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