Brazil seizes $2B from suspects of US drug, money laundering sanctions

Brazilian Federal Police recently seized assets worth roughly $2 billion in a drug trafficking and money laundering investigation. 

Days before this seizure, the U.S. Treasury imposed sanctions against two Brazilian nationals and four companies tied to Primeiro Comando da Capital, one of Latin America’s largest criminal organizations.

Brazil’s crackdown on crypto crime continues 

Brazilian Federal Police, in a major operation called “Exchange,” seized assets worth roughly $2 billion. The operation deployed more than 50 officers across São Paulo state to execute 13 search-and-seizure warrants and 11 temporary arrest warrants targeting a money laundering network tied to drug trafficking. 

A federal court in São Paulo ordered the seizure of assets, valuables, and cryptocurrency belonging to the suspects, with preliminary analysis identifying transactions exceeding $1.92 billion. 

The suspects could face charges including criminal association, money laundering, and tax evasion. The warrants covered addresses in São Paulo city, Santos, Praia Grande, and Santana de Parnaíba.

Days before the crackdown, the U.S. Treasury imposed sanctions on two Brazilian nationals and four companies allegedly linked to Primeiro Comando da Capital (PCC), one of Latin America’s largest criminal organizations.

“Exchange” was reportedly planned before the US sanctions were announced, but had to be accelerated after the Treasury’s designation. 

Why did the U.S. sanction Brazilian nationals and companies?

Victor Henrique de Oliveira Shimada and Stella Stefanie Nunes Henrique de Oliveira, along with three Brazilian companies and one Portuguese firm, were sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) for the alleged laundering of drug proceeds on behalf of PCC. 

Shimada reportedly functioned as the connection between PCC operatives based in Florida and foreign drug traffickers. His network allegedly moved more than $30 million in illicit proceeds generated in U.S. cities. Most of the funds were transferred back to Brazil as cryptocurrency.

Shimada’s name was involved in Brazilian money laundering investigations dating to 2024. São Paulo prosecutors had previously charged him in a case involving the alleged diversion of funds from a sponsorship deal between a soccer club and a betting company, but that earlier case did not accuse him of PCC membership.

Nunes Henrique de Oliveira, described by the Treasury as Shimada’s relative and close associate, allegedly served as his secretary and coordinated bulk cash pickups to support the laundering operation.

The sanctioned companies are three Brazilian firms: Victory Trading Intermediação de Negócios Cobranças e Tecnologia Ltda, Pixwave Soluções de Pagamentos Ltda, and Wave Construções Inteligentes Ltda, along with Portuguese firm Avenidas Flutuantes Unipessoal LDA. O

FAC said Victory Trading was used to launder money stolen from a Brazilian soccer club.

On the same day it sanctioned the PCC-linked network, OFAC also designated 134 cryptocurrency wallet addresses tied to ISIS-Khorasan. Tether subsequently froze funds in 131 Tron wallets that had received more than $1.4 million since 2023.

PCC was first sanctioned by the Treasury in 2021 for international drug trafficking, and again in 2024, Diego Macedo Gonçalves do Carmo was designated as a financial operator for the organization.

How are U.S. sanctions affecting Brazil?

The U.S. sanctions arrived weeks after the Trump administration classified strained relations between the two countries by labeling the PCC as a terrorist organization. 

Fabrício Polido, an international law professor at the Federal University of Minas Gerais and a partner at L.O. Baptista Advogados, told Courthouse News that the sanctions take immediate effect in the U.S. but carry no automatic legal force in Brazil. Criminal consequences would require Brazilian authorities to investigate under domestic law. 

Foreign financial institutions, including Brazilian ones, face the threat of secondary sanctions if they knowingly facilitate significant transactions involving the designated parties, meaning that those institutions could begin imposing more restrictive policies to avoid getting in the bad books of U.S. authorities. 

Brazil’s government under President Luiz Inácio Lula da Silva has pushed back against the terrorist designation, arguing that while PCC uses terror tactics in the communities it controls, it remains a profit-driven criminal organization. 

Federal Police Director General Andrei Rodrigues called the designation a “mistake,” saying terrorist organizations have ideological or religious motivations while criminal factions pursue economic goals. 

Six people connected to the network’s Florida operations were arrested by the FBI and indicted on money laundering charges in federal court in the Southern District of Florida in January. The new sanctions and Brazil’s subsequent operation targeted the São Paulo side of the alleged pipeline.