A Brazilian judge on Friday froze about US$300 million in assets owned by a former Rio de Janeiro state governor, five of his aides and French tire maker Michelin over illegal tax breaks.
Judge Neusa Larsen ordered the freeze in the wake of a Rio court decision last month ordering the parties to reimburse the government the amount of illegal tax breaks received beginning in 2010.
At the time, Sergio Cabral was Rio de Janeiro state governor. The tax incentives were given to support the expansion of a Michelin tire plant in the city of Resende, Brazil.
Larsen ordered a freeze of 1.03 billion reais (US$300.9 million) that should have gone to the Brazilian National Treasury, said a statement published on Friday, which did not specify a breakdown for Cabral, the five aides and the company.
The tax breaks for Michelin “violated legal and constitutional precepts ... that caused serious injuries to public coffers,” she said.
The illegal tax advantages “certainly contributed to the financial crisis that is devastating Rio de Janeiro state,” Larsen added.
Michelin said it would appeal.
The company insisted that the incentives were part of Rio’s economic and social development fund, an effort begun in 1997 to spur investment in the state and which is currently under investigation by authorities.
The French company said it has been present in Brazil for decades and that all its activities are conducted “with total integrity and respect for laws and their institutions.”
The court freeze comes after last week’s arrest of Cabral, who governed from 2007 to 2014, on bribe-taking and money laundering charges.
Federal police swooped in on his home on Nov. 17, an offshoot of the sprawling anti-corruption investigation codenamed operation Car Wash.
Cabral, of Brazilian President Michel Temer’s Brazilian Democratic Movement Party, is charged with being part of a group that allegedly embezzled 220 million reais from public works projects, including Rio’s Maracana Stadium.
Authorities are probing alleged embezzlement and bribery by some of the country’s highest-ranking politicians in a scheme that ransacked state oil company Petroleo Brasileiro SA.
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