Brazilian police launch fraud investigation into Rio 2016 works

Federal police in Brazil on Tuesday launched an operation to investigate claims of fraud stretching into millions of U.S. dollars, concerning the construction of the Deodoro Sports Complex, one of the main sites for the Rio 2016 Olympic Games in August.

In a press release, the Brazilian federal police stated that 12.5 percent of the 675.7 million reais (193 million U.S. dollars) provided by the Ministry of Sports was thought to be embezzled by construction companies Queiroz Galvao and Grupo OAS, which built the complex.

According to the police, the consortium led by the two companies signed contracts with non-existent firms to hide fictitious payments.

The Deodoro Sports Complex in the north of the city will host the events of canoeing, kayaking, BMX and mountain biking, hockey, shooting, modern pentathlon and rugby sevens.

The investigation into this case began last year but picked up a few weeks ago when judicial authorities froze 128.5 million reais (36.7 million U.S. dollars) that the government was set to pay to the consortium for works carried out at the Complex.

Queiroz Galvao and Grupo OAS, two of Brazil's largest construction giants, are also under investigation as part of Operation Carwash, a federal police investigation into bribery and kickbacks at state oil giant Petrobras, which has prosecuted dozens of officials and executives who were part of the Petrobras corruption ring. Endit