Brazil debt scam exposed

By Steve Kingstone
BBC Brazil correspondent in Sao Paulo

The Brazilian authorities have uncovered what is thought to be a multi-million dollar tax fraud in Rio de Janeiro.

The alleged scam involved public employees deleting company debts from computer files. A number of people have been arrested and the police are double-checking tax records in other parts of the country.

Around $90m is said to have been wiped from computer files

By all accounts, this was an audacious and lucrative scam in which federal employees are said to have charged Brazilian companies a commission before deleting all record of the debts those companies owed the government by way of tax and national insurance contributions.

The total amount wiped from computer files is said by the police to be around $90m.

But the true figure could be as much as four times that, according to some estimates.

The police want to speak to a total of 27 people, among them lawyers, a company director and 14 public servants.

A number of arrests have already been made.

Brazil's tax authorities are now looking closely at company records in Rio de Janeiro and elsewhere to establish whether this was a nationwide fraud.

In Rio itself, the tax auditor leading the investigation has been put under police protection after receiving death threats.