Brazil police target Rio's ex-governor, Refit owner in tax probe

By Ricardo Brito and Rodrigo Viga ‌Gaier

BRASILIA/RIO DE JANEIRO, ​May ​15 (Reuters) - Brazil's federal police on Friday carried out search and seizure warrants against former Rio de Janeiro Governor Claudio Castro and ordered privately owned refinery Refit to ‌halt operations in a tax evasion investigation, a Supreme Court decision showed.

The court ⁠ordered Refit's owner, businessman Ricardo Magro, who lives in the United States, to be arrested on pre-trial detention.

As the country's ‌tax authority has carried out ‌investigations into financial crimes over the past year, Brazilian President Luiz Inacio Lula da Silva has publicly called on U.S. President Donald Trump to arrest Magro.

Friday's ruling said lenient authorities allowed ​an organization in Rio de Janeiro led by Magro to carry out illegal activities from around 2020 to this year and described links between organized crime and influential public officials ⁠including Castro, who was governor until March.

In the decision, Justice Alexandre de Moraes ordered Magro to be put on Interpol's red notice ​list, alerting foreign law enforcement agencies to arrest him.

The ruling also froze about 52 billion reais ($10.3 billion) in assets, most belonging to Refit which is ​one of Brazil's largest chronic tax debtors, with tens ‌of billions of reais owed to federal and state authorities.

Castro's attorneys said they were reviewing the court's decision and nothing of relevance was seized during ⁠the search. Magro did not immediately respond to a request for comment.

Refit said in a statement it has been adopting measures to regularize tax liabilities incurred by prior management and it has never falsified tax returns.

In ⁠a statement that did not name suspects, the police announced an investigation of a fuel industry conglomerate suspected ​of asset concealment and transferring funds abroad.

Since last year, Brazil's tax authority has played a central role in major operations it says are uncovering money laundering schemes linked to criminal organizations in the fuel sector, identifying multiple ‌operations abroad.

Castro resigned from office in March. An electoral court barred him from holding office for eight years for abuse of political and economic ‌power, illicit fundraising and other issues in the 2022 general election. He is seeking to overturn the ruling ⁠and run for a Senate seat ‌in the October elections.

($1 = 4.9850 reais)

($1 = ​5.0574 reais)

(Reporting by Ricardo Brito in Brasilia and Rodrigo Viga Gaier in Rio de Janeiro; Writing by Isabel Teles; Editing by Toby Chopra, Hugh Lawson and ‌Cynthia Osterman)

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