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Santander's upcoming accounting director is currently undergoing criminal investigations in Brazil on suspicion of misappropriation of funds while working as a senior executive at the country's largest bank.
Documents reviewed by the Financial Times show that Brazilian federal prosecutors have directed police this month to begin an investigation into Alexsandro Broedel Lopes, former chief financial officer of Itaú Unibanco.
The federal prosecutor's office in Sao Paulo introduced the case to police after conducting a preliminary investigation into the alleged crime, documents show.
Following the charges by Itaú, Broedel personally benefited from the fees he paid to an external consultant whom he hired on behalf of the bank while working there.
Brodel has not been charged with a crime and Brazilian federal police said they have not confirmed or commented on the possibility of an ongoing investigation. The federal prosecutor's office said it could not confirm the investigation.
Brodel joined Santander in October and will take over as Chief Accounting Officer of the Spanish group for the next few months. This is the role that he becomes a member of the bank's senior management team.
He had the necessary approvals from regulators, Santander said. These include passing the European Central Bank's “proper and appropriate” tests for senior management.
The police investigation revelation filed two civil suits against Brodel and others in December and January after Itau, the largest bank in Brazil, the total assets, and after filing two civil cases against Brodel and others, police alleged misappropriation of funds as well as those currently being investigated.
The bank also brought claims to attract the attention of prosecutors, according to documents seen by the FT.
After initial enquiries on hearing the statement from Brodell's attorney, the prosecutor determined that a police investigation of the officer was necessary to “determine the facts,” the documents show.
Santander said Brodel was a “highly acclaimed senior executive” who was “planned to take over CAO later this year,” adding that he would “monitor the development.” The Spanish lender previously said Brodel would start as chief accountant in “early 2025.”
A Broedel spokesman described Itaú's allegations as “baseless and meaningless.”
“Alexandro Brodel has always been ethical and transparent in all his activities at the bank over the course of his 12 years,” the statement said.
According to a report from the prosecutor sent to the police and a civil claims court filing, Itau alleges that he inhaled the money from the bank through an arrangement with an outside consultant that Brodel hired on behalf of the lender.
Itaú claimed that after the funds were transferred through a series of entities, he finally received 40% of the fees Brodel paid to the consultant. According to the civil lawsuit, Brodell allegedly illegally received a total of $4.866 billion ($834,000).
Itaú claimed that he could not find a proper record of 16 of his 40 contracts with the consultant, claiming that they could have been fictitious and that the work may not have been carried out.
According to the documents, Brodel also reportedly did not report to Itaú's internal compliance team that he and the outside consultant were partners in a company called Broedel Consultores Associados.
In a report sent to police, the prosecutor said that the amount Brodel received from the consultant was a loan.
However, the prosecutor's report questioned why the transfer was made through the company rather than directly by the consultant, and why the relationship between the two men was not declared to Itau. The report also focused on the timing of payments and raised questions about “the proximity of transfers related to payments made by banks.”
Brodel resigned from Itau in July to get a job in Santander and was placed on a gardening holiday by the Bank of Brazil. According to the civil lawsuit, Itau dismissed him after revealing his claim against him.
Santander's board of directors agreed that Brodel was appointed as the group's Chief Accounting Officer last June before the allegations came to light.
A Broedel spokesman said: [Itaú’s] board. The services mentioned were known to Itau Unibanco and were requested in various regions of the bank.
“It is very strange that Itau Unibanco should only raise doubts about alleged misconduct after Brodel resigns from his banking position to gain global position as one of his major competitors. In this case, Alexandro Brodel will take appropriate legal action.”
A person close to Santander described the police investigation as “a preliminary stage to determine whether criminal prosecution will be filed,” adding that it does not mean that the prosecution will proceed.
Itau declined to comment.
