On February 10th and March 10th and 20th, administrative decisions taken by the Office of the Comptroller General (CGU) were published in the Official Federal Gazette (DOU) applying sanctions against eight Brazilian companies from different segments : (i) Decal Brasil Ltda. (logistics and fuel storage); (ii) Master Projetos e Empreendimentos Culturais Ltda. (cultural services); (iii) Volkswagen do Brasil Indústria de Veículos Automotores Ltda. (automobile industry); (iv) Business to Technology Consultoria e Análise de Sistemas Ltda. (IT services and consulting); (v) Seara Alimentos Ltda. (food industry); and (vi) Rabello Entretenimento Eireli (cultural services); (vii) Qubo Tecnologia e Sistemas Ltda.; and (viii) Telemikro Telecomunicações Informática e Microeletrônica Ltda. (the latter two companies from the IT services and consulting segment).
Furthermore, on March 20th, decisions were also published in the DOU rejecting requests for reconsideration submitted by the following four companies that had already been sanctioned previously by the CGU: (i) MDI Consultoria Empresarial Ltda.; (ii) EHD – Assessoria e Participações Ltda; (iii) Soundzilla Music Monsters Produções Audiovisuais Ltda.; and (iv) Construtora Barbosa Mello S/A. The fines total approximately BRL 61.9 million and arise from Administrative Proceedings for Accountability (PAR) in which the practice of harmful acts against the Public Administration in violation of Law 12,846/2013 (Anticorruption Law) and other anti-corruption rules was verified. In the case of companies judged by decisions of first consideration, if they do not appeal, they have thirty days to pay the value of the fines to the public treasury and to comply with the penalties of extraordinary publication, by publishing an extract of the decision. Additionally, after the deadline for appeals, the companies will be registered in the National Register of Punished Companies (CNEP) and, in the case of penalties of declaration of ineligibility and impediment to the right to bid and contract, also in the Register of Ineligible and Suspended Companies (CEIS).
CGU verified that the company Decal Brasil paid undue benefits, through its representative, to the then Supply Officer of Petrobras S/A, with the intent to renew the contract for the provision of storage and berthing services for liquid bulk vessels in port facilities. Thus, there was a violation of Article 5, I and IV, “d” of Law 12,846/2013 (Anti-Corruption Law) and Article 88, III of Law 8,666/2013 (Bidding Law).
These facts were the object of criminal lawsuit n. 5000553-66.2017.4.04.7000, resulting in the conviction of Decal Brasil’s representative (Mr. Mariano Marcondes Ferraz) for the crimes of active corruption and money laundering, according to a sentence issued by the 13th Federal Court of Curitiba/PR on 03/05/2018, which became final and unappealable on 02/19/2020.
According to Decision n. 9, of February 9, 2023, issued by the CGU in the context of PAR n. 00190.105349/2020-07, the following penalties were applied to Decal Brasil: (i) impediment for bidding or contracting with the Public Administration; (ii) a fine in the amount of BRL 3,905,734.97; and (iii) extraordinary publication of the administrative decision in a mass-circulation media for a period of one (1) day, in a notice posted at the establishment for a period of sixty (60) days, and on its website for a period of thirty (30) days.
Master Projetos and Volkswagen Brasil
PAR n. 00190.106298/2019-99 was opened by CGU against Master Projetos and Volkswagen Brasil to investigate deviation of the object of the cultural project “Brasilidade Sinfônica”, approved on 10/04/2012 as PRONAC 127240, through fraud and simulation, for the benefit of the event sponsor. The case was one of those investigated in the Federal Police’s Operation “Boca Livre”, which investigated fraud related to the Rouanet Law between 2002 and 2014. It should be noted that the Rouanet Law is a federal government program that seeks to encourage companies and individuals to support the cultural sector through tax incentives. Part of the money that would go to Income Tax (IR) can be used to sponsor events that receive the seal of the Rouanet Law, and the amount allocated to the cultural action can be deducted from the IR due by the individual or company that supports them.
In this context, it was verified that the cultural project submitted by Master Projetos to the Ministry of Culture, which obtained the sponsorship of BRL 1,000,000.00 by Volkswagen Brazil, had its object changed without the knowledge or agreement of that Ministry, since the event was transformed into a corporate party celebrating the 60 years of Volkswagen in Brazil, for a selected group of people and not for the general public. Furthermore, there was fraud in the rendering of accounts of the incentive project by Master Projetos. Consequently, article 5, V, of Law 12,846/2013 (Anticorruption Law), and article 38, of Law 8,313/1991 (Rouanet Law) were violated.
According to Decision N. 19, dated February 9, 2023, issued by CGU, the following penalties were applied to Master Projetos: (i) fine in the amount of BRL 2,940,317.28; and (ii) extraordinary publication of the administrative sanctioning decision, as follows: (a) in a mass-circulation media in the area where the violation was committed and where Master Projetos operates, or, in its absence, in a nationwide publication; (b) in a notice posted in the establishment itself or in the place where the activity is performed, in a location allowing public visibility, for a period of 45 (forty-five) days; and (c) in its website, in the main page of such website, for a period of 45 (forty-five) days.
Furthermore, the absorption of the fine in theory applicable on the basis of the violation of the Anticorruption Law in the amount of BRL 1,470,158.64 by the fine imposed on the basis of the violation of the Rouanet Law in the amount of BRL 2,940,317.28 was recognized, in order to avoid the application of two fines on the same facts, as provided in article 22, paragraph 3, of Decree-Law no. 4,657, of September 4, 1942 (Law of Introduction to the Rules of Brazilian Law), which establishes that “the penalties imposed on the agent will be taken into account in the dosimetry of the other penalties of the same nature and related to the same fact”.
Regarding Volkswagen Brasil, according to decision n. 18, dated February 9, 2023, a fine in the amount of BRL 22,423,482.15 was applied, as a result of CGU’s acceptance of the request for a consensual and collaborative resolution made by the company, and objective responsibility for the illegal acts committed by Master Projetos was recognized. Furthermore, the company promoted the reimbursement of funds unduly received.
Business to Technology, Qubo Tecnologia e Telemikro Telecomunicações
Operation “Gaveteiro” was launched in 2020 to investigate the embezzlement of funds from the Ministry of Labor, through the hiring of the IT company Business to Technology, in Brasilia and in five other states. The investigations started after the publication of a CGU report that pointed out that the hiring of the company was only a subterfuge used by the criminal organization that operated in the Ministry of Labor to divert money from the agency. The hiring was precisely for the purpose of acquiring technology solutions and licenses to detect fraud in the granting of unemployment insurance.
In the context of PAR n. 46012.000645/2017-61 opened by CGU, it was verified that the company Business to Technology paid undue advantages to public officials of the Department of Employment and Wages of the Ministry of Labor, as well as to a related person. In addition, the company defrauded the bidding procedure and presented a false certificate of technical capacity that was inadequate to meet the requirement foreseen in the respective invitation to bid. Thus, there was a violation of article 5, I and IV, “a”, “b” and “d” of the Anticorruption Law and of article 7 of Law 10.520/2002 (Law that instituted the reverse auction as a bidding modality).
Based on this understanding, through Decision n. 23, of February 9, 2023, the following sanctions were applied: (i) a fine in the amount of BRL 7,725,193.82; (ii) extraordinary publication of the sanctioning administrative decision, in the following terms: (a) in a mass-circulation media in the area where the violation was committed and where the company operates, or, in its absence, in a nationwide publication for a period of 1 (one) day; (b) in a notice posted in the establishment itself or in the place where the activity is performed, in a location allowing public visibility, for a period of 75 (seventy-five) days; (c) in its website, in the main page of such website, for a period of 30 (thirty) days; and (iii) impediment to bid or contract with the Federal Government for the period of 5 (five) years.
The CGU’s investigations related to Operation “Gaveteiro” also found that the companies Qubo Tecnologia and Telemikro Telecomunicações submitted covering proposals in the bidding process to help the company Business To Technology to win the Reverse Auction N. 24/2016, configuring fraud to the competitive nature of the reverse auction by raising prices in the bidding for anti-fraud software for the Ministry of Labor. As a result, the following sanctions were applied to Qubo Technology and Telemikro Telecomunicações:
- impediment to bid or contract with the Federal Government for a period of 4 (four) years (Qubo Tecnologia) and 3 (three) years (Telemikro Telecomunicações); (ii) fine, in the amount of BRL 299,260.38 (Qubo Tecnologia) and BRL 58,190.05 (Telemikro Telecomunicações); (iii) extraordinary publication of the administrative sanctioning decision in a means of communication of wide circulation in the area where the violation was committed and where the legal entity operates or, in its absence, in a publication of national circulation for a period of 1 (one) day; in a notice posted in the establishment itself or in the place of exercise of the activity, in a location that allows visibility by the public, for a period of 45 (forty-five) days (Qubo Tecnologia) and 30 (thirty) days (Telemikro Telecomunicações); and on its website, prominently displayed on the main page of said site, for a period of 30 (thirty) days (for both companies).
Operation “Carne Fraca” (Weak Flesh Operation) launched by the Federal Police in 2017 revealed a scheme of payment of undue advantages to public officials of the Federal Superintendence of Agriculture, Livestock and Supply of MAPA in the State of Paraná by the company Seara. Moreover, frauds were detected in the issuance of National and International Health Certificates and in the performance of health inspections, generating losses in inspection activities and unduly facilitating the shipment of food products to China and Chile and, consequently, the general progress of the company’s activities. As a result, there was a violation of art. 5, I and V of the Anticorruption Law.
Through Decision n. 36, of February 9, 2023, issued within PAR n. 00190.105434/2018-42, CGU applied the following penalties to Seara Alimentos: (i) fine in the amount of BRL 14,803,766.47; (ii) extraordinary publication of the administrative sanctioning decision, to be fulfilled as follows: (a) in a mass-circulation media in the area where the violation was committed and where the legal entity operates, or, in its absence, in a national publication, for a period of 1 (one) day; (b) in a notice posted in the establishment itself or in the place where the activity is exercised, in a location that allows visibility by the public, for a period of 30 days; and (c) on its website, prominently displayed on the main page, for a period of 30 days.
Recently, in a decision published in the Federal Official Gazette on March 10, 2023, CGU imposed a fine on the company Rabello Entretenimento Eireli in the amount of BRL 420,000.00, for involvement in unlawful acts against the Public Administration. The decision acknowledged that the fine, which was imposed based on article 38 of the Rouanet Law, absorbed the fine of BRL 210,000.00, applicable under articles 5, II and V and article 6, I of the Anticorruption Law.
The sanction resulted from a PAR established based on Law n. 12,846/2013 (Anticorruption Law) and Law n. 8,313/91 (Rouanet Law), and it was verified that the company subsidized a law firm through proposition n. 154771, of the National Program to Support Culture (Pronac) with the Ministry of Culture, so that the law firm could use tax waiver funds to finance a private commemorative event. In addition, it made it difficult for the Ministry of Culture to supervise the execution of Pronac, by holding a secondary event on the same day and place as the law firm’s commemorative event.
It was verified that Rabello Entretenimento diverted the object of Pronac n. 154771 and defrauded the rendering of accounts, thus violating items II and V of article 5, of Law n. 12,846/2013, paragraphs 1 and 2, of article 2, paragraph 1, of article 23, and article 38, of the Rouanet Law.
The fine penalty was extended to the partner of the legal entity, Mr. Fábio Conchal Rabello, due to the disregard of the legal personality of the company, on the grounds of abuse of right, by the use of Rabello Entretenimento to facilitate, cover up or conceal the practice of illicit acts, pursuant to article 14 of Law No. 12,846/2013. Considering that the company was dissolved in 2017, the penalty of extraordinary publication of the condemnatory decision was not applied.
MDI Consultoria Empresarial
Company SICPA Brasil Indústria de Tintas e Sistemas, which entered into a Leniency Agreement with CGU in 2021, was responsible for the payment of undue advantages to the former auditor of the Federal Revenue Service responsible for overseeing the contract carried out by the National Mint (Casa da Moeda). To pay the bribe, SICPA used the company CFC Consulting Group INC., already sanctioned by the CGU (Decision N. 146/2022), with whom SICPA had an agency contract. The amounts received from SICPA by CFC Consulting were then passed on to the company MDI Consultoria Empresarial Ltda.
Throughout the process, which included elements from police investigations (Operations Vices and Sphinx), it was found that MDI Consulting was owned by relatives of the former auditor of the Federal Revenue Service, demonstrating that the company was in fact a mere shell company in the scheme to facilitate the payment of bribes to the then public agent, and the scheme allowed the payment of at least BRL 30 million to the former tax auditor.
Through a decision published in the DOU on March 20, 2023, CGU rejected MDI Consultoria Empresarial’s request for reconsideration, maintaining the application of the following sanctions: (i) declaration of ineligibility to bid or contract with the Public Administration; (ii) fine, in the amount of BRL 9,175,000.00; and (iii) extraordinary publication of the sanctioning administrative decision: in the edition of one of the four newspapers with the largest print run and circulation in Brazil, according to Instituto Verificador de Comunicação (IVC Brazil), at the company’s choice or, alternatively, on the main page of the internet portal of one of such vehicles; in a notice posted for thirty (30) days at the main pedestrian entrances to the headquarters of the legal entity, in a position that allows visibility by the public; and on its website, accessible through a link made available in a fixed banner, containing the title of the statement, displayed for thirty (30) days on the company’s main website. Furthermore, due to the abuse of rights in the use of the legal entity, the decision was extended to the personal assets of the former federal revenue auditor and his wife.
EHD – Assessoria e Participações
The investigation resulted from the sharing of information gathered in the scope of Operation Spy, launched in October 2017 by the Federal Police, jointly with the Internal Affairs Office of the Federal Revenue Service, in which it was identified that data related to foreign trade activities were extracted from internal systems of the Federal Revenue Service, with illegal actions of employees of that body, and passed on by intermediary companies, upon payment, to companies that perform export or import activities, among which EHD.
According to the decision published on March 20th, 2023, CGU rejected the request for reconsideration of EHD – Assessoria e Participações, keeping the fine in the amount of BRL 105,448.54.
The decision also pierced the veil, extending the effects of the sanction to the personal assets of Mr. Edwin Humprey Davy.
Soundzilla Music Monsters
The company Soundzilla Music Monsters made payments to companies associated with former congressman André Vargas, Limiar Consultoria e Assessoria Ltda. and LSI Solução em Serviços Empresariais Ltda. According to the investigation, the payments were actually made at the request of the company Borghi Lowe, as a bribe for it to win bidding processes held by the Caixa Econômica Federal bank and the Ministry of Health, whose objects were the hiring of advertising and publicity services.
The companies Mullenlowe and FCF Brasil, which succeeded Borgh Lowe, admitted their responsibility for the acts and entered into a Leniency Agreement with the CGU in 2018. From the collaboration of the companies it was possible to expand the CGU investigation, which resulted in the accountability of several other legal entities involved in the illicit act.
In a decision published on March 20th, 2023, CGU dismissed the request for reconsideration of one of them, the company Soundzilla Music Monsters, maintaining the following sanctions: (i) declaration of ineligibility to bid or contract with the Public Administration; (ii) fine, in the amount of BRL 15, 328.04; and (iii) extraordinary publication of the condemnatory decision: in a mass-circulation media in the area where the violation was committed and where the legal entity operates or, failing that, in a nationwide publication; in a notice posted in the establishment itself or in the place where the activity is carried out, in a location that allows visibility to the public, for a period of 30 (thirty) days; and in its website, prominently placed on the main page of the site, also for a period of 30 (thirty) days.
Construtora Barbosa Mello
The CGU found that Construtora Barbosa Mello, in collusion with other participants in a consortium, sought to frustrate the competitive nature of bids promoted by VALEC Engenharia, Construções e Ferrovias S/A in which it participated.
For this reason, on March 20th, 2023, CGU decided to reject the request for reconsideration submitted by Construtora Barbosa Mello in relation to the original decision of August 12th, 2022, maintaining the application of the penalty of declaration of ineligibility to bid or contract with the Public Administration.
It should be noted, finally, that since 2016, 100 companies have been punished by the CGU for noncompliance with the Anticorruption Law and other related regulations. Altogether, the penalties exceed BRL 807,750,449.43. In addition, CGU has signed leniency agreements with 25 companies, whose pacts exceed BRL 18,303,789,248.17. The most recent Leniency Agreements were signed in December 2022, with the following companies: BRF S.A., Resource Tecnologia e Informática Ltda., Mar Holding Participações S.A. and Operadora e Agência de Viagens TUR Ltda.
For more information, please contact Saud Advogados.