The former Secretary of Planning of Santo André and former Deputy Secretary of the Municipal Revenue of São Paulo Arnaldo Augusto Pereira was arrested this Wednesday (15) in Bahia. Pereira was sentenced to 18 years in prison in 2019 for involvement in the ISS Mafia, scheme that diverted more than R$500 million from the São Paulo city hall between 2007 and 2013.
He was located in Mucuri, a coastal city in the south of the state, where he lived “under a possibly false identity after having faked his own death to try to escape serving his sentence”, according to the Public Ministry of Bahia (MPBA).
The São Paulo Public Ministry (MPSP) had requested Pereira’s preventive detention after detecting the presentation of a false death certificate by the defendant in the process and the end of the seizure of Pereira’s assets, in favor of his family. With the forged document, the legal actions against the former tax auditor had been extinguished.
According to the São Paulo Public Ministry, Pereira received a bribe of R$1,177,000.00 to allow the construction of a residential project in Santo André. While he held the position of undersecretary of revenue for São Paulo, he led the embezzlement fraud scheme.
Pereira had already been arrested in previous operations in 2019 and 2021 and convicted of corruption. He also lied in the plea agreement signed with the MPSP.
The sentences total more than 45 years in prison.
ISS Mafia
In the scheme, the criminal group charged bribes to release medium and high-end real estate projects in the capital of São Paulo between 2009 and 2011. “Tax auditors, now exonerated, offered companies the possibility of paying less Tax on Services of Any Nature (ISS), pocketing a large part of the amounts owed. In certain cases, only 10% of the amount paid was directed to public coffers. It is estimated that the scheme generated R$ 500 million”, informed the Special Action Group for the Suppression of Economic Crimes (GEDEC) of the Public Ministry at the time.
Around 410 businesses, including construction companies, shopping malls and even hospitals, benefited from the fraud. Payment of the ISS is a necessary condition for the entrepreneur to obtain the “Occupancy Permit” and for the building to be occupied. To construct a building, developers and construction companies establish a model of social organization known as a Specific Purpose Society (SPE). Each company or developer can have several SPEs. Close to the end of the work, it is necessary to pay the ISS and obtain a tax clearance certificate.
Tax auditors issued ISS payment slips with amounts much lower than required and charged companies or developers to deposit large amounts, usually in cash, into their bank accounts. Without this “payment” in their personal accounts or those of their own companies, the ISS discharge certificates were not issued and the project was not released for occupation.
This mode of operation is similar to the ICMS payment fraud in the state of São Paulo, revealed this year.
