BROOKLYN, N.Y. (CN) – A Brazilian national and former CEO of the largest petrochemical company in Latin America was arraigned Wednesday on charges that he conspired to use a massive slush fund to pay bribes to government officials and political parties in Brazil in exchange for business.
Jose Carlos Grubisich, former CEO of Braskem SA, appeared before Senior U.S. District Judge Raymond Dearie in the Eastern District of New York on Wednesday afternoon. He’s accused of conspiring to shunt $250 million into a secret slush fund which was then partly used to pay bribes to officials, allegedly between 2002 and 2014.
A clean-shaven Grubisich pleaded not guilty, wearing a trim navy suit, his gray hair slicked back on his head but slightly disheveled.
Grubisich’s role in the scheme involved falsifying the books and lying to the Securities and Exchange Commission, prosecutors say. A grand jury returned a three-count indictment against him in February, which was unsealed after Grubisich’s arrest Wednesday morning and asserted violations of U.S. corruption law, conspiracy and money laundering charges.
Fraudulent contracts with offshore shell companies Braskem controlled generated the slush fund, prosecutors say. Those funds were then allegedly funneled to a special bribery department within the conglomerate Odebrecht, which doled out the money on Braskem’s behalf.
Grubisich served as CEO of the Brazil-based Braskem from 2002 to 2008 before a two-year stint on the board of directors.
His attorney, Glen Kopp of Mayer Brown, said he would try to submit a bail package by Thursday, with a possible bail conference Friday or Monday. In the meantime, Dearie kept the former executive in custody.
Grubisich’s wife, dressed all in black with a Chanel purse, was present in the gallery of the 10th-floor Brooklyn courtroom Wednesday, and Dearie gave him permission to say hello to her from a distance.
The defendant spoke to her in Portuguese from the far end of the well, and they blew each other a kiss. They had both been traveling to New York on vacation, Kopp said. A reporter in the room who spoke Portuguese said Grubisich asked his wife to contact friends with apartments in New York to help secure bail.
A status conference in the case was scheduled for Dec. 13. The assistant U.S. attorneys on the case are Alixandra Smith and Julia Nestor.
Braskem and Odebrecht, a Brazil-based holding company with a controlling stake in Braskem, settled for $3.5 billion with the U.S., Brazil and Switzerland in 2016 over bribery allegations after a crackdown on corruption in the Brazilian state-owned oil company Petrobras.
Brazil does not extradite its citizens, according to the government’s detention memo.