Rio De Janeiro police recently noticed a bitcoin scam involving food contracts that total close to 14 million USD. This is the first case of Brazilian authorities attributing the use of bitcoin to money siphoning purposes.
What was going on.
Stemming cooperation which started earlier this week, between the Brazilian Federal Revenue Service (RFB), Federal Public Ministry (MPF), Federal Police (PF), and the Public Ministry of the State of Rio De Janeiro (MPRJ), Brazilian authorities revealed that they picked up on a racket trail involving price manipulations of and the overbilling of a food supplying company responsible for feeding prison inmates.
According to authorities, 16 warrants have been issued to these supposed bitcoin siphoners, with 7 arrests already made. Additionally, an individual known as Felipe Paiva is reported to be the main culprit and head of this operation. It has been disclosed that Mr. Paiva has been involved in this money siphoning project since early 2001.
Paivas bitcoin bread scheme.
Paiva was hired in 2001 by the Brazilian government to work on the Bread-School project. Shortly after which he founded his own nonprofit, the mission of which was to deliver food to prisons.
The price of bread in Brazil went from 6 cents to over 60 in a matter of around 10 years. According to Brazilian prosecutor, Carvalho Neto, Paiva had a 5-year contract with Brazilian authorities promising to pay over 20 million USD for his food distribution services.
Guess what though? Seems as though more than half of those funds were siphoned off using primarily the bitcoin and transferred to fraudulent overseas accounts and companies.
Paiva was busted due to transferring a stupendously uncharacteristic amount of funds.
Impact on the crypto environment?
It’s no secret that indeed, cryptocurrencies, and primarily the bitcoin has been utilized to carry out criminal activities. Though, I am certain that Mr. Paiva’s activities will not have a substantial impact on the market as a whole. Additionally, it seems that authorities are becoming more competent and refined when it comes to catching bitcoin culprits.
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