SÃO PAULO--The Brazilian judge overseeing the investigation into
alleged corruption at state-controlled oil company Petroleo
Brasileiro SA on Wednesday convicted eight people of crimes related
to kickbacks and bribery.
Judge Sergio Moro found former Petrobras executive Paulo Roberto
Costa and currency dealer Alberto Youssef guilty of money
laundering, and Mr. Costa of belonging to a criminal organization.
The convictions stemmed from activities related to the construction
of an oil refinery in the northeastern Brazilian state of
Pernambuco.
Mr. Costa, formerly the head of the company's downstream
division, was sentenced to time served plus house arrest while
wearing an ankle monitor until Oct. 1, 2016. The judge reduced the
sentence by six months because of Mr. Costa's cooperation with
authorities. Mr. Costa still faces charges for other crimes related
to the Petrobras investigation.
Mr. Youssef, who also faces more charges, was sentenced to nine
years in jail, but that was reduced to three years because of his
cooperation with authorities.
The sentences and convictions can be appealed. Lawyers for Mr.
Costa weren't immediately available to comment and Mr. Youssef's
lawyer, Rodolfo Martins, said he is evaluating the judge's
decision. Both men have admitted to wrongdoing and cooperated with
investigators.
Mr. Costa and Mr. Youssef are the most prominent of those
convicted in the probe. Prosecutors have said they first uncovered
the irregularities while investigating Mr. Youssef's
money-laundering activities, when his gift of a luxury vehicle to
Mr. Costa led investigators to Petrobras. Mr. Costa testified about
the case before a congressional committee.
The other six were convicted of money laundering or belonging to
a criminal organization or both of these crimes. The investigation
is called Operation Car Wash, named after the site of some of the
alleged wrongdoing.
Investigators say that Petrobras suppliers regularly inflated
the price of contracts with the oil company. Petrobras executives
involved in the scheme then allegedly skimmed off the extra money,
keeping some for themselves and passing some on to politicians,
including members of President Dilma Rousseff's Workers' Party and
allied parties in Congress, according to investigators.
Ms. Rousseff and her party have denied any involvement in or
knowledge of the alleged corruption.
Since the start of the probe in March 2014, four former
Petrobras executives, including Mr. Costa, and at least 23
construction executives have been charged with crimes. Some have
admitted wrongdoing in exchange for lesser punishment, prosecutors
say, while others have denied involvement and await trial.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Rogerio
Jelmayer at rogerio.jelmayer@wsj.com
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