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Brazil's recent enforcement actions against cartels and laundering operations appear related to recent U.S. policy initiatives, especially its "all of government" approach to eradicating cartels. Corporations operating in Latin America would be well served to understand the U.S. Department of Justice (DOJ)'s white collar enforcement priorities and tailor their risk assessment and compliance programming to protect against cartel influence.
The "Carbono Oculto" Operation in Brazil
In August 2025, Brazil launched what it described as its largest operation ever against organized crime, known as Operação Carbono Oculto (Hidden Carbon). The investigation targeted an alleged multibillion-dollar money-laundering scheme orchestrated by the Primeiro Comando da Capital (PCC), a major drug gang that emerged after a São Paulo prison massacre in the 1990s and has since grown into a multinational criminal organization with operations across much of Latin America.
According to Brazilian authorities, the scheme involved large-scale fraud in the purchase and sale of fossil fuels (hence the operation's name), including the adulteration of gasoline and the irregular importation of substances, along with tax evasion and a sophisticated money-laundering structure relying on fintech companies and investment funds.
A national task force of 1,400 agents from the Federal Revenue Service, Federal Police, Public Prosecutor's Office, and multiple other agencies carried out raids in ten states, executing hundreds of search and seizure warrants against individuals and businesses.
The Office of the Attorney General for the National Treasury froze more than BRL 1 billion (approximately $200 million) in assets, including real estate and vehicles, to secure payment of tax liabilities that had already reached BRL 10 billion (approximately $2 billion). The country was stunned as images circulated of federal agents entering the glossy offices of major corporations on Avenida Faria Lima, Brazil's equivalent of Wall Street.
In sum, the investigation revealed that actors linked to the PCC controlled hundreds of gas stations, diverted and irregularly imported chemical inputs such as methanol and naphtha, and adulterated the final product sold to consumers. Their control extended to national distributors and ethanol plants. The profit margins generated from the adulterated fuel were concealed from tax authorities, allowing billions of BRL to flow without any fiscal oversight.
The laundering structure grew increasingly sophisticated over time, relying on fintech platforms, asset managers and investment funds, including digital payment mechanisms and accounts with undisclosed or non-identifiable beneficiaries. Authorities described this ecosystem as a kind of "digital tax haven" embedded within Brazil's own financial system.
The proceeds generated from adulterated fuel sales and large-scale tax fraud were then reinvested into legitimate businesses, real estate, motels and franchise chains, further deepening the infiltration of organized crime into the formal economy.
Experts noted that the scheme not only caused multibillion losses to the Brazilian economy, but also created serious consumer-safety risks, given the high levels of fuel adulteration uncovered during the investigation.
In the aftermath of "Carbono Oculto," Brazil's Central Bank amended several rules governing financial transactions conducted by fintechs, expressly citing the need to make money laundering more difficult. In parallel, the Brazilian Senate approved a bill, now awaiting a vote in the lower house, which seeks to impose harsher penalties on companies that use chronic tax delinquency as a deliberate business strategy.
Subsequent Developments and the Involvement of U.S.-Based Companies
Following "Carbono Oculto," a series of additional operations were launched by Brazilian authorities at both the federal and state levels. Among the most significant was an operation carried out in late November targeting a privately owned refinery considered one of the country's worst tax offenders, which allegedly used Delaware-based firms to facilitate the laundering of illicit proceeds.
The case prompted Brazil's Finance Minister, Fernando Haddad, to publicly announce that Brazil will seek formal U.S. cooperation in combating organized crime within its fuel sector. Haddad stated that the government could present Washington with evidence showing how funds were being illicitly funneled out of Brazil, as well as footage reportedly depicting weapons arriving in Brazil inside containers shipped from the United States.
During a press conference in São Paulo, Federal Revenue Secretary Robinson Barreirinhas remarked: "We are closing in on those who, from the upper floors of Faria Lima or from their mansions in Miami and Europe, undermine public security in Brazil." He also emphasized that Delaware entities often exploit rules that exempt them from U.S. tax on income earned abroad, leaving them untaxed in both jurisdictions, a scheme often tied to money laundering.
How the Brazilian Operation Aligns With the New Enforcement Priorities of Washington
It is well established that one of the core law-enforcement priorities of the current U.S. administration in Latin America is combating cartels and transnational criminal organizations (TCOs), framed explicitly as a national-security imperative.
Attorney General Pam Bondi issued a memorandum in February 2025, pointedly titled "Total Elimination of Cartels and Transnational Criminal Organizations." Along the same lines, after the temporary pause in FCPA enforcement, the new DOJ guidelines issued in June 2025 expressly shifted the focus of anti-corruption enforcement away from traditional corporate bribery and toward foreign bribery that enables or facilitates the criminal activities of cartels and TCOs.
However, this paradigm shift is not limited to the FCPA. On the contrary, under the national-security lens, anti-corruption enforcement has increasingly converged with anti-money laundering, counter-terrorist financing, and counter-narcotics strategy. These categories of misconduct are now treated not merely as financial or corporate violations, but as geopolitical threats.
Within this framework, Brazil — which has historically been a major focus of FCPA enforcement, with 34 DOJ-led cases to date — stands out even more clearly. It likely is not a coincidence that "Carbono Oculto" was launched only months after the U.S. government formally requested that Brazil designate the PCC as a Foreign Terrorist Organization (FTO).
According to Reuters, the request was made during a meeting between senior Brazilian and U.S. officials, including David Gamble, who leads sanctions strategy at the U.S. State Department. A source present at the meeting reported that U.S. representatives referenced FBI intelligence indicating that the PCC maintains operational cells even within the United States, particularly in Massachusetts, New York, and Florida.
To further illustrate how aggressively the U.S. government is now deploying the full spectrum of legal tools to combat drug cartels, one need only look to a recent development in Mexico — which ranks second among Latin American countries in the number of FCPA cases brought by the DOJ (26), behind only Brazil.
In June 2025, the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) issued a set of historic orders identifying three Mexican financial institutions as "primary money-laundering concerns" in connection with illicit opioid trafficking. As a consequence of this designation, the institutions were subjected to a series of near-prohibitive financial sanctions, including a ban on U.S. banks maintaining correspondent accounts, processing transactions on their behalf, or engaging in any business relationship that touched their payment flows. In practical terms, the measures effectively cut these firms off from the U.S. dollar system, leaving significant portions of their international operations unviable.
Final Considerations for Entities Operating in Latin America
Companies currently operating in, or considering expansion into, Latin America should not ease their compliance programs or risk-assessment processes under the assumption that the recent shift in FCPA enforcement priorities places them outside the DOJ's crosshairs.
The reality is precisely the opposite: while traditional corporate criminal enforcement may indeed no longer be the primary focus, the Trump administration's intensive emphasis on cartels and TCOs in the region has created a new risk landscape: one with potentially broader and even more severe consequences.
The United States does not rely exclusively on the FCPA to take action, and it is increasingly evident that although enforcement priorities may have shifted, the overall level of scrutiny has not diminished. If anything, it has expanded.
Chief compliance officers and general counsel, long used to assessing business opportunities and counterparties in Latin America through the traditional lens of a country's corruption levels, must now also evaluate whether their foreign partners have any nexus to organized crime.
Corruption remains a vitally important factor. However, given the evolution of prosecutorial strategy, prior practices designed merely to identify and avoid corrupt individuals or entities are no longer sufficient. Companies must implement robust policies, procedures, and training to proactively prevent, detect, and respond to any conduct that could be construed as material support to a cartel, TCO, or FTO.
Organizations should also build more comprehensive compliance safeguards when operating in markets where such criminal groups exert significant influence, ensuring that their financial flows, partnerships, and supply chains do not become inadvertent channels for illicit activity.
Sources:
https://www.justice.gov/ag/media/1388546/dl?inline
https://corpgov.law.harvard.edu/2025/06/25/doj-resumes-fcpa-enforcement-with-new-guidelines/
https://home.treasury.gov/news/press-releases/sb0179
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
