- Washington investment firm revamps $221 million civil lawsuit
- EIG Management claims it was tricked into bad investment
Brazilian conglomerate Odebrecht SA and two other shipyard operators have been added to a Washington investment firm’s $221 million fraud suit against Petroleo Brasileiro SA.
EIG Management Co. and eight of its managed funds claim the companies and Petrobras conspired to trick them into investing the money in a now-bankrupt off-shore drilling business, Sete Brasil Participacoes SA.
The firm’s revised complaint was filed Wednesday in federal court in Washington. The case was first brought in February, when EIG alleged Petrobras concealed a wide-ranging bribery and kickback scheme that became public in 2014 after a probe known as Operation Car Wash.
Sete, which was founded to aid the the state-controlled oil company’s offshore drilling and exploration, was originally led by senior and former Petrobras officials, according to EIG. Exposure of corruption scheme prompted the oil company to cut the number of rigs it planned to lease from Sete to 10 from 28.
Sete filed for bankruptcy last month.
Odebrecht and the other shipyard operators named in the revamped complaint are accused of authorizing or paying -- or both -- bribes and kickbacks to Petrobras, Sete and political party representatives to win shipbuilding contracts.
“In an effort to finance this unlawful conspiracy while maintaining its covert nature, and thus with at least the implicit assent of all co-conspirators, Petrobras and its Sete-installed Petrobras cronies fraudulently induced the funds to invest in Sete through materially false and misleading written and oral statements,” according to EIG’s revised complaint.
The shipyard defendants joined the Petrobras-Sete scheme at or before the time the oil and offshore companies “perpetrated acts of fraud” on EIG and its funds, making them liable, the investment firm alleged.
Odebrecht’s press representative said in an e-mail that the company won’t comment on the suit. The company is based in Salvador, Brazil. Petrobras hasn’t filed a response to the initial complaint.
The case is EIG Energy Fund XIV LP v. Petroleo Brasileiro SA, 16-cv-00333, U.S. District Court, District of Columbia (Washington).