Sem Refino: Federal Police Search Ex-Governor Cláudio Castro Again in Rio Fuel-Fraud Case

Federal Police in Brazil have conducted fresh searches, tied to Operation Sem Refino, the fuel-sector fraud investigation. This marks the third time this year that former Rio de Janeiro Governor Cláudio Castro has been targeted by federal officers. Sem Refino, the federal probe, centers on Grupo Refit, the company behind the former Refinaria de Manguinhos in Rio.

The investigation alleges the group evaded significant tax bills and concealed funds abroad, positioning it as one of Brazil's largest fiscal fraud cases. On Friday, agents executed 16 search warrants, signed off by the Supreme Court, targeting seven individuals, including Castro. This phase focuses on environmental licenses for the refinery, with prosecutors suspecting they were granted without technical staff approval.

Grupo Refit is accused of selling fuel while evading the main state sales tax (ICMS) and moving money offshore to hide profits. The group is already Brazil’s largest tax debtor, facing years of legal challenges from state and federal authorities. In the first phase, the Supreme Court froze around R$52 billion (approximately US$10 billion) in Grupo Refit's financial assets, suspending their operations.

Separately, prosecutors allege the company evaded roughly R$26 billion (around US$5 billion) in taxes. While Castro is not accused of running the scheme, he is suspected of using state machinery to favor Refit through tax breaks and licenses. His defense maintains he was unaware of the alleged wrongdoing and asserts his government adhered to the law and technical advice.