Mossack Fonseca: Brazil says beach apartments tied to corruption scheme

Beach-side apartments in Brazil may have been used as bribes and to launder money for members of the ruling Workers' Party, police and prosecutors said on Wednesday after ordering six arrests and 15 search warrants.

In the latest phase of Brazil's largest-ever corruption probe, investigators are looking into whether construction firm OAS SA used apartments in the Solaris complex in Guaruja as bribes in a corruption scheme involving state-run oil firm Petrobras.

Dozens of executives and politicians have been arrested or are under investigation on suspicion of overcharging Petroleo Brasileiro SA, as the company is formally known, and using part of the proceeds to bribe members of President Dilma Rousseff's ruling coalition.

The apartments were held in the name of front companies, such as Murray Holdings LLC that was registered by Panama-based Mossack Group, prosecutors said at a news conference, adding Mossack has previously helped hide criminal activity offshore.

"There is real evidence of money laundering. We are looking principally at this time at the Vaccari family," said prosecutor Carlos Fernando dos Santos Lima, referring to Joao Vaccari, the jailed former treasurer of the Workers' Party.

Vaccari has been convicted and sentenced to just over 15 years in jail.

OAS declined to comment. Mossack Fonseca, a law firm, said in a statement it had been "unjustly and erroneously included in matters with which we have no involvement at all." The firm said it was not under investigation and had not been contacted by police or the judiciary.

Local paper O Globo said former President Luiz Inacio Lula da Silva also had an apartment held under another name in the complex. Lima did not confirm this.

"If there was an apartment that was in his name ... or someone in his family, we will investigate it like any other," Lima said. Police said all the apartments in the complex were under investigation.

A statement on the website for Lula's office said the former president repudiates attempts to link his name with the corruption scandal. The statement reiterated that Lula's family bought an option for an apartment in the complex but later decided not to go through with the purchase. Lula has previously threatened to prosecute journalists for smearing his name in connection with the Petrobras case.

Neither Lula nor Rousseff is under investigation, though Rousseff's approval rating has suffered from the accusations against her political party.

Police only gave the name of one person that had been arrested, publicist Nelci Warken.