Petrobras Ex-Director Sentenced to 5 Years for Money Laundering

The former director of international operations at Brazil’s state-controlled oil company was sentenced to five years in prison for money laundering in the latest development in a multibillion-dollar graft investigation.

Nestor Cervero, who left Petroleo Brasileiro SA in 2014, set up a front company in Uruguay to purchase an apartment in an upscale Rio de Janeiro neighborhood with illicit funds, according to a document published by a court in Curitiba, Brazil, where the case is before a judge. Cervero’s lawyer, Edson Ribeiro, said by telephone that he will appeal the decision.

Cervero is the second former director at Petrobras, as the biggest offshore oil producer is known, to be convicted in what has become the biggest corruption scandal in a country with a history of graft. Paulo Roberto Costa, the company’s former head of refining, will serve two years of house arrest after turning state’s witness last year under a sentence reduction agreement.

The corruption investigation, dubbed Carwash because of money laundering operations run out of a gas station, identified a cartel of construction companies that allegedly colluded to overcharge Petrobras for project contracts. The companies allegedly funneled part of the largess to political parties including President Dilma Rousseff’s Workers’ Party and allies. The party has said all contributions were legal.

Cervero was in being held in Curitiba under preventative arrest when he was convicted. As part of his sentence, Cervero was also fined more than 500,000 reais ($159,000).

Before it's here, it's on the Bloomberg Terminal. LEARN MORE