SAO PAULO: The former mayor of Brazil’s most populous city on Saturday rejected a court ruling in the Channel Island of Jersey that found him guilty of stealing $10.5 million.

“First, I am not a criminal,” former Sao Paulo mayor Paulo Maluf, now 81, told local media. “Second, I do not have an account, that was a journalistic mistake, you set up this story,” Maluf told the G1 Globo news website. Maluf was found guilty of diverting the funds from Sao Paulo city coffers to accounts belonging to businesses run by relatives in the low-tax European island, according to the ruling published on island’s legal website.

Maluf, Sao Paulo mayor 1993-1996 and now a federal deputy, remained defiant.

The ruling “has no legal basis because any public work on Brazilian territory, if it was carried out in an irregular manner — which is not the case here — will have to be judged by Brazilian justice,” he said.

The Jersey court ruling said the money was diverted from the construction of a city road, and the funds were deposited by Maluf’s son Flavio after his father left office.

In late 1997 and early 1998, the municipality of Sao Paulo “was the victim of a fraud substantially as alleged,” the ruling in part read, and that Paulo Maluf “was a party to that fraud.”


Flavio Maluf will have to return at least $22 million, including interests, according to the Sao Paulo’s prosecutor’s office, which filed the case with Jersey authorities.

“Since the Jersey judge concluded that there was fraud, compounded interests apply, and according to the Jersey court the amount can reach $32 million, while a minimum of $22 million was already guaranteed,” said chief prosecutor Celso Augusto Coccaro.

Jersey, the largest of the Channel Islands, is a self-governing Parliamentary democracy and has its own financial, legal and judicial systems.

The island’s tax-haven status has come under the microscope as Britons become increasingly angry over revelations of tax-avoidance schemes while they grapple with recession and an unsustainable public deficit.