By Luciana Magalhaes And Will Connors 

RIO DE JANEIRO--Brazilian federal prosecutors Friday filed charges against the chief executive of construction group Odebrecht SA and several other construction-industry executives, detailing what they said was an elaborate use of Swiss bank accounts to hide cash as part of an alleged corruption scheme involving state-run oil company Petróleo Brasileiro SA.

The charges include money laundering, corruption, and organized crime. They represent a significant setback for Latin America's biggest construction group and one of Brazil's most important companies.

Chief Executive Marcelo Odebrecht, along with Otávio Azevedo, chief executive of Brazilian construction conglomerate Andrade Gutierrez, and other executives from both companies, were arrested last month as part of an investigation into a graft ring that allegedly siphoned billions from Petrobras.

The construction executives have been held in the southern city of Curitiba, against the objections of both companies' lawyers. None of the executives had been charged with a crime until Friday.

Odebrecht SA and Andrade Gutierrez have denied the allegations made against their executives. Odebrecht has called the arrest of its chief executive unnecessary because it was cooperating with authorities.

Odebrecht said again late Friday in that evidence presented by prosecutors didn't justify keeping its chief executive in prison. It also said its lawyers would use documents provided by prosecutors to work on its executives defense.

A spokeswoman for Andrade Gutierrez said the company is evaluating the evidence presented Friday by prosecutors and will seek to prove its executives' innocence.

Messrs Odebrecht and Azevedo have in the past denied wrongdoing.

Prosecutors allege that several of Brazil's biggest construction companies formed a cartel to drive up prices of Petrobras contracts and kick back some of the money to Brazilian politicians, political parties and executives at the oil company.

Some of the defendants have admitted wrongdoing in exchange for lesser punishment and are cooperating with investigators, prosecutors said, while others have denied involvement and await trial.

The charges against Mr. Odebrecht, a household name in Brazil, who oversees a vast global operation, are a particularly striking moment in the investigation that has upended Brazilian political and business circles.

"Brazil will not condone the practice of crimes, however powerful the perpetrators," said prosecutor Deltan Dallagnol. "No one is above the law."

Federal prosecutors detailed a complex scheme in which they said millions of dollars in bribes were sent via a number of offshore bank accounts controlled by units of Odebrecht, then transferred to corrupt Petrobras executives. Odebrecht businesses alone made 115 money-laundering transactions worth 1.038 billion reias ($310 million), according to prosecutors.

The charges add to growing pressure on the administration of President Dilma Rousseff, who is struggling to contain an economy bordering on recession and whose popularity ratings have fallen to near-record lows. Ms. Rousseff, who hasn't been implicated in the alleged scheme, was the chairwoman of Petrobras during much of the time the alleged illicit activities were under way. A spokesman for the president wasn't available for comment Friday.

Petrobras has said it was a victim and is cooperating with authorities. A company spokesman also wasn't available for comment.

"The new charges put more fuel on the political crisis fire," said Pedro Fassoni Arruda, a political scientist and professor at the Pontifical Catholic University of São Paulo.

The investigation into alleged corruption at Petrobras has expanded outside Brazil since the case was uncovered last year. The U.S. Securities and Exchange Commission and the Justice Department are both investigating Petrobras, whose shares are listed in New York.

On Wednesday, authorities in Switzerland said they were investigating subsidiaries of Odebrecht in connection with the allegations and that they believe Odebrecht units paid bribes from accounts in Switzerland to separate Swiss bank accounts held by former Petrobras directors. Swiss authorities didn't name specific Odebrecht operating units or the Swiss banks involved.

Mr. Dellagnol, the Brazilian prosecutor, on Friday thanked the Swiss authorities for their help in tracking the bank accounts of those purported to be involved in the scandal.

Write to Will Connors at william.connors@wsj.com and Luciana Magalhaes at Luciana.Magalhaes@dowjones.com

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