Santander government below prison investigation in Brazil | USAEMALL.com

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Santander’s incoming chief accounting officer is under criminal investigation in Brazil for alleged misappropriation of funds while working as a senior executive at the country’s largest bank.

Documents reviewed by the Financial Times show that Brazilian federal prosecutors this month instructed police to launch an investigation into Alexsandro Broedel Lopes, the former chief financial officer at Itaú Unibanco.

The Federal Public Prosecutor’s Office in São Paulo referred the case to police after making preliminary inquiries into the alleged criminality, the documents show.

It follows accusations by Itaú that Broedel personally benefited from the fees it paid to an external consultant he hired on behalf of the bank while working there.

Broedel has not been charged with any crime, and Brazil’s federal police said they did not confirm or comment on possible ongoing investigations. The federal prosecutor’s office said it could not confirm the investigation.

Broedel joined Santander in October and is due to take over as the Spanish group’s chief accounting officer in the coming months — a role that will make him a member of the bank’s senior management team.

He had received the necessary approvals from regulators, Santander said. These include passing the European Central Bank’s “fit and proper” test for senior managers.

The revelation of a police investigation comes after Itaú, Brazil’s largest bank by total assets, filed two civil lawsuits against Broedel and others in December and January making claims of misappropriation of funds similar to those now being probed by police.

The bank also brought the claims to the attention of the public prosecutor, according to the documents seen by the FT.

After initial inquiries, during which it heard representations from Broedel’s lawyers, the prosecutor decided a police investigation into the executive was needed to “determine the facts”, the documents show.

Santander said Broedel was a “highly regarded senior executive” who was “due to take over as CAO later this year”, adding that it was “monitoring any developments”. The Spanish lender previously said that Broedel would start as chief accounting officer in “early 2025”.

In a statement to the FT provided by Santander, a spokesperson for Broedel described the allegations by Itaú as “unfounded and meaningless”.

“Alexsandro Broedel has always conducted himself ethically and transparently in all his activities throughout his 12 years at the bank”, the statement said.

According to the report by the prosecutor, which it sent to the police, and the civil claim court filing, Itaú has alleged that Broedel siphoned funds from the bank through an arrangement with an external consultant who he had hired on behalf of the lender.

Itaú claimed that Broedel ultimately received 40 per cent of the fees it paid to the consultant, after the money was transferred through a series of entities. In total, Broedel is alleged to have illegally received R$4.86mn ($834,000), according to the civil lawsuit.

Itaú alleged that it could not find proper records for 16 of the 40 contracts with the consultant and claimed that they may have been fictitious and that the work may never have been carried out.

Broedel also allegedly failed to report to Itaú’s internal compliance team that he and the external consultant were partners in a company called Broedel Consultores Associados, according to the documents.

In its report sent to the police, the prosecutor said that Broedel had told it that the sums he received from the consultant were loans.

However, the prosecutor’s report questioned why the transfers were made through companies rather than directly by the consultant and why the relationship between the two men was not declared to Itaú. The report also noted the timing of the payments, raising questions about the “proximity of the transfers in relation to the payments made by the bank”.

Broedel resigned from Itaú in July to take the job at Santander and was placed on gardening leave by the Brazilian bank. Itau later dismissed him after uncovering the allegations against him, according to the civil lawsuit.

Santander’s board of directors agreed Broedel’s appointment as group chief accounting officer last June, before the allegations came to light.

The spokesperson for Broedel said: “The consultant mentioned by Itaú Unibanco had already been providing services to the bank for decades, long before Broedel was invited to join [Itaú’s] board. The services mentioned were known to Itaú Unibanco and required by different areas of the bank.

“It is deeply strange that Itaú Unibanco should raise suspicions about alleged misconduct only after Broedel had resigned from his position at the bank to take up a global position at one of its main competitors. Alexsandro Broedel will take the appropriate legal action in this case.”

A person close to Santander described the police investigation as a “preliminary phase to determine whether a criminal prosecution can take place’’, adding that it does not mean a prosecution will proceed.

Itaú declined to comment.