Brazil's federal police, the Polícia Federal, launched an operation on Thursday (22nd) against an alleged Ponzi scheme believed to have caused losses to more than 10,000 investors in Brazil and abroad. Those under investigation offered cryptocurrency investments and trading carried out by investment bots, promising returns of up to 70% a month. A court ordered the freezing of up to 16.57 million EUR in assets and funds belonging to the suspects.
Named Operation São Silvestre, the action is carrying out 12 search and seizure warrants in five Brazilian states: Santa Catarina, Paraná, São Paulo, Minas Gerais and Pernambuco. Investigators say the suspects raised funds from investors between 2018 and 2020, using digital platforms to offer investments with the hallmarks of a Ponzi scheme.
According to the Polícia Federal, the companies advertised returns of 2% to 3% a day, or 10% to 70% a month — figures considered incompatible with how financial markets actually work.
To put this in perspective, an investment of 1,657 EUR with a 70% return in a single month would generate a profit of about 1,160 EUR, before fees or taxes. By comparison, traditional fixed-income investments typically offer far lower returns, especially over such short periods.
According to investigators, the promise of high returns was used as a strategy to attract investors. The platforms presented supposed opportunities to invest in cryptocurrency and in operations automated by trading bots.
These systems are programs designed to execute buy and sell orders for financial assets automatically. While legitimate tools of this kind exist, their use does not guarantee profits and does not eliminate the risk of losses.
In the case under investigation, authorities suspect the promise of high, recurring returns was used to sustain a fraudulent money-raising scheme.
Investigators estimate that more than 10,000 people were affected. The investors were spread across different Brazilian states as well as abroad.
The Polícia Federal did not disclose the total amount actually lost by victims. The 16.57 million EUR ceiling set by the court refers to the authorised asset freeze, not necessarily to the losses caused by the scheme.
Operation spans 5 states, targets 28 suspects
The 12 search and seizure warrants are being carried out in ten municipalities. In Santa Catarina, the operation covers Florianópolis, Blumenau, Pomerode, Indaial and Rio do Sul. In Paraná, agents are operating in Curitiba, while in São Paulo state the action is taking place in Álvares Machado.
Searches are also being conducted in Belo Horizonte, in Minas Gerais, and in the Pernambuco cities of Recife and Jaboatão dos Guararapes.
The warrants were issued by the 3rd Court of the State Division for Organised Crime of Santa Catarina.
Alongside the searches, the court authorised the freezing of assets and funds belonging to 15 individuals and 13 companies, up to a limit of 16.57 million EUR. The measure aims to prevent the suspects' assets from being moved or transferred during the investigation, preserving funds that could later be used to compensate victims for any losses.
The freeze, however, does not mean the full amount has already been located or recovered. Nor is there any guarantee that investors will get back the money they put in.
According to the Polícia Federal, the suspects have been charged with criminal association, fraud, money laundering, offences against the National Financial System and offences against the capital markets.
The charges mark a stage in the police investigation and do not amount to a conviction. Any criminal liability will depend on the next stages of the judicial process.
The operation comes at a time of heightened attention from Brazilian authorities toward platforms offering cryptocurrency investments.
Although Bitcoin and other crypto assets are traded regularly in the market, criminals also exploit the popularity of these technologies to promote fraudulent investments.
One of the main warning signs is the promise of high, guaranteed returns, especially when the supposed gains are presented as the result of automated operations said not to depend on market conditions.
In Ponzi schemes, funds contributed by new participants can be used to pay earlier investors, creating an appearance of profitability until the inflow of new money becomes insufficient to sustain the payments.
Operation São Silvestre seeks to identify those responsible for the platforms under investigation, clarify what happened to the funds raised, and gather evidence on the suspects' activities.
The Polícia Federal has also opened a channel to receive information from investors who may have been affected. As of the official statement, the Polícia Federal had not disclosed the names of the companies under investigation nor confirmed whether any arrests were made during the operation.
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