Meat Packing Owner Arrested in New Twist to Plea-Deal Scandal

Joesley Batista, the Brazilian tycoon who turned JBS SA into a global meat powerhouse, has handed himself into police, the latest chapter of a scandal that has tipped Brazil back into political chaos and left his family’s business empire reeling.

Batista, 45, went into police custody in Sao Paulo on Sunday afternoon following a Supreme Court order for his arrest. J&F Investimentos SA, the holding company that controls JBS, confirmed that J&F executive Ricardo Saud also turned himself in. Earlier, Judge Edson Fachin issued arrest warrants and the temporary suspension of the immunity granted in a plea-bargain agreement signed by the businessmen with Brazilian authorities in May.

Batista’s detention is another dramatic twist in a saga that has gripped Brazil and raised doubts about the future of his family’s business empire. The May plea deal followed Batista’s testimony to the authorities that he was was complicit in a widespread and sustained scheme to bribe politicians. The revelations caused public outrage but at the time appeared to spare Batista the threat of jail.

On Monday, Federal Police carried out search and seizure warrants in Rio de Janeiro and Sao Paulo at addresses linked to Batista, JBS and former prosecutor Marcello Miller, newspaper Folha de S. Paulo reported. Police confirmed via text message that an operation tied to the J&F executives’ plea deal was in progress, without giving further details.

Lawyer Hired

Press officers for JBS, J&F, Batista and Miller didn’t immediately respond to requests for comments on the searches.

Antonio Carlos de Almeida Castro, a renowned criminal defense attorney who recently joined J&F’s defense team, said the searches had been expected, Folha reported. Kakay, as the lawyer is known in Brazil, was photographed in the backseat of a car with Batista on Sunday as the tycoon turned himself in to police. His list of rich and famous clients includes billionaire banker Andre Esteves, who was jailed in the Carwash probe in 2015 and released three weeks later.

The court decision to arrest Batista followed a request by Rodrigo Janot, the country’s chief prosecutor, who said Batista and Saud omitted information from testimony submitted to prosecutors earlier this year in which they confessed to graft and other crimes. According to the judge, if the two executives remained at liberty, they would continue to see advantages in concealing evidence.

The alleged omissions came to light on Sept. 5, when an audio recording emerged of a conversation between the pair, receiving blanket coverage in the Brazilian media.

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Both men didn’t lie or omit information from their plea-bargain and they’re willing to co-operate with prosecutors, according to a statement issued by J&F. Batista and Saud also said last week in a separate statement that what they had said on the tape wasn’t true, while also offering an apology for their comments.

In a separate statement, a lawyer for the two men said that Janot’s decision to request their arrest despite their cooperation undermined the credibility of plea-bargain deals in general.

In the recording, Saud is heard telling Batista that Miller, who at the time worked with the Prosecutor General’s Office, was trying to influence Janot’s position on the terms of the plea deal. Miller resigned a short time later and was hired as a lawyer by the legal firm that worked on the plea agreements signed by the seven J&F executives.

The tape raised questions over the terms of the plea deal, which has been criticized for treating too leniently Batista and other executives connected to the case. Some of Batista’s remarks on the recording, including a comment that he would never go to jail, have further enraged Brazilians.

Miller, who gave testimony to police in Rio last week, said in a Sept. 5 statement he didn’t commit any crimes.

New terms

In order to prevent the May plea agreement from being scrapped completely, J&F and its executives are said to be discussing new terms with prosecutors, including raising the fines that Batista would have to pay, Folha reported Saturday.

The imprisonment of Batista will likely boost President Michel Temer, putting him in a better position to fight any new accusations from the prosecutor general. Last month, Temer’s allies in the lower house defeated the motion that would have put him on trial and forced him to step aside. That victory paved the way for the president, at least temporarily, to turn his attention to the economic reforms needed to fix Brazil’s battered public finances.

Batista and Temer have been publicly trading barbs since May, when it emerged that the beef tycoon had secretly recorded a meeting with the president and submitted the tape to the Supreme Court as evidence that Temer was part of a cover-up scheme involving a jailed former lawmaker. Batista has called Temer a thief and the head the country’s “largest and most dangerous criminal organization." Temer has described Batista as a "notorious bandit."

JBS shares fell as much as 3.2 percent to 7.93 reais in Sao Paulo trading.