February 26, 2014 / 1:00 AM / in 4 years

STXNEWS LATAM-Safra National denies Brazil politician had, controlled accounts

Safra National Bank of New York, a lender controlled by banking tycoon Joseph Safra, denied on Tuesday that a Brazilian politician accused of embezzling public money ever had or controlled accounts at the institution. A Brazilian prosecutor told Reuters on Monday that Deutsche Bank AG agreed to pay $20 million to settle charges in Brazil that Europe’s largest investment bank by revenue helped manage funds embezzled by former city of São Paulo officials in the 1990s. According to São Paulo state prosecutor Silvio Marques, more than $340 million from a scheme allegedly run by former mayor Paulo Maluf and other officials moved freely within accounts in Deutsche Bank, Safra National Bank, UBS AG and Citigroup Inc.

The Deutsche bank settlement may add pressure on UBS, Safra National and Citigroup to pay as much as $70 million in compensation to settle allegations they also took on deposits and wired money from the scheme, Marques added.

“Paulo Maluf has never had an account at Safra National Bank of New York,” the lender said in a statement to Reuters. Safra National did not say whether it was notified by prosecutors, nor immediately confirm whether Maluf’s associates owned accounts at any of its branches.

Courts in Brazil and the island of Jersey have found Maluf, currently a lower house lawmaker, guilty of several charges, while other lawsuits related to corruption allegations while he was mayor of São Paulo between 1993 and 1996 are still under analysis. Maluf has repeatedly denied any wrongdoing. Efforts to reach Maluf’s lawyers for comment were unsuccessful.

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