MercoPress. South Atlantic News Agency

Petrobras former CEO has assets frozen under court investigation

Gabrielli was CEO of Petrobras between 2005 and 2012 and allegedly is involved in a scheme to overbill the company an estimated 12.4 million dollars

A Brazilian state court froze the assets of former Petrobras Chief Executive Officer Jose Sergio Gabrielli amid an investigation of graft and money-laundering in the government-run oil producer's contracts with construction companies.

 State prosecutors in Rio de Janeiro suspect Gabrielli participated in a scheme to overbill Petrobras by 32 million Reais (12.4m dollars) for construction projects by local company Andrade Gutierrez SA. Gabrielli was CEO of Petrobras between 2005 and 2012.

The court also allowed prosecutors to access Gabrielli's tax, banking and phone records, as well as those of former Petrobras executives Renato Duque and Pedro Barusco. Duque and Barusco are being formally investigated by federal prosecutors.

Judge Roseli Nalin accepted the request made last month by prosecutors for access to the bank accounts of Jose Sergio Gabrielli, seven other former Petrobras officials and executives of Andrade Gutierrez, Brazil's second-largest construction firm. Nalin's ruling was made public Wednesday.

A press representative for Andrade Gutierrez said in an email that the company had not been informed by the court and could not offer comment on the judicial decision.

The company has no involvement in the Petrobras scandal and all contracts with the oil firm were carried out within proper legal guidelines, the representative said.

The investigation of Gabrielli is just one branch of a spreading multibillion-dollar scandal that has weighed heavily on Petrobras shares.

Prosecutors say engineering firms paid bribes to win Petrobras contracts, funneling a cut of the overcharged projects to executives, vendors and political parties mainly Brazil's ruling Workers' Party of presidents Dilma Rousseff and Lula da Silva.