São Paulo freezes R$ 10.8 billion in new phase of Operation Hidden Carbon against tax fraud
The São Paulo State Attorney General's Office reached 32 new targets, including investment funds and companies, with asset freeze measures totalling R$ 10.8 billion for asset concealment.
São Paulo's Attorney General expands billion-real offensive against financial market concealment scheme
The Attorney General's Office of the State of São Paulo (PGE-SP) has expanded its legal offensive against structured tax fraud, reaching 32 new targets with asset freeze measures in the order of R$ 10.8 billion, according to agenciasp.sp.gov.br. Among those affected are investment funds, companies operating in the financial market and individuals and legal entities under investigation for participation in asset protection schemes.
The action is an extension of Operation Hidden Carbon, whose investigations identified the use of financial instruments to move assets beyond the reach of creditors and to undermine the state's tax collection.
Complex network of interposed funds and companies
According to the investigations, the suspects used a network of investment funds, financial institutions, asset managers, portfolio managers and interposed business entities to artificially fragment asset ownership. The mechanism made it difficult to identify the actual beneficiaries: resources and shareholdings circulated among different financial vehicles, formally presented as independent entities, but subject to convergent economic control structures.
The PGE-SP states that tackling contemporary tax fraud requires reconstructing the actual links of control and availability of assets, distinguishing legitimate operations from arrangements deliberately designed to frustrate creditors.
Operation launched after two years of investigation
Operation Hidden Carbon was officially launched in August 2025, after investigations began in 2023. The action mobilised more than 1,400 agents from the Federal Police, Federal Revenue Service, São Paulo Public Ministry and the Government of the State of São Paulo.
The target was a structure that dominated the fuel sector, encompassing refineries, distributors and more than 1,000 petrol stations. The organisation used product adulteration, tax fraud and shell companies to finance its activities, in a scheme with estimated tax evasion of more than R$ 7.6 billion.
The new phase of the operation represents, according to the PGE-SP, an advance in the strategy for recovering tax credits, by directing legal action not only against formally identified debtors, but also against the economic structures set up to protect assets from legal collection.
Source: Google News BR — São Paulo