Operation Greenwashing: Brazil’s Federal Police carry out operation against criminal group suspected of selling US$34 million illegal carbon credits

Verra says it “welcomes” the Brazilian authorities actions.

Yesterday, Brazil’s Federal Police launched Operation Greenwashing. The aim is to dismantle a criminal organisation suspected of selling about US$34 million worth of allegedly illegal REDD carbon credits.

Four people were arrested. The police seized two planes, a speedboat, and luxury cars including a Porsche and two Mercedes Benz.

Brazilian internet news site g1 reports that one man was arrested in Araçatuba in São Paulo state. The two planes were seized in Birigui, also in São Paulo state.

Two of the arrest warrants and four search and seizure warrants are in Araçatuba. The leaders of the criminal organisation are residents of the city, g1 reports.

Here’s a Federal Police video of the start of the operation:

The police investigation revealed a land fraud scheme that had been going on for more than a decade. The fraud started in Lábrea in the state of Amazonas. It involved the duplication and forgery of property titles, resulting in the illegal appropriation of about 538,000 hectares of public lands.

The Federal Police’s press release states that,

Between 2016 and 2018, the criminal organisation expanded its illegal operations, reusing property titles and entering false data into the Land Management System, with the collaboration of public servants and technical managers.

In addition to the sale of carbon credits, the criminals were allegedly logging and cattle ranching in protected areas, raising “ghost” cattle in areas with environmental restrictions, selling virtual timber credits, and obtaining fraudulent environmental licenses.

In Brazil, all timber has to have a Forest Origin Document, which is also known as a timber credit. Illegal timber laundering involves buying fake timber credits from forest management projects that extract fewer trees than what’s allowed under their management plans. Criminals use the fake timber credits to “launder” illegally logging — timber taken from Indigenous Peoples’ territories or protected areas.

The criminal organisation extracted more than one million cubic metres of timber. According to the Federal Police, the logging caused environmental damage valued at US$114 million. The criminal organisation also acquired US$155 million in illegally occupied land.

Five arrest warrants

Under Operation Greenwashing, the 7th Federal Court of the Judiciary Section of Amazonas has issued five arrest warrants and 76 search and seizure warrants. The police operation involves land in the states of Rondônia, Amazonas, Mato Grosso, Paraná, Ceará, and São Paulo.

The police will also carry out the following actions:

• 108 precautionary measures other than prison;

• eight suspensions from public service;

• four suspensions of professional registration with the Regional Engineering and Agronomy Council (CREA);

• seven blocks on the issuance of Forestry Origin Documents; and

• US$300 million of the criminals’ allegedly ill-gotten gains will be frozen.

Operation Greenwashing has the support of the National Institute of Colonization and Agrarian Reform, the Brazilian Federal Revenue Service, the National Civil Aviation Agency, the Brazilian Institute of the Environment and Renewable Natural Resources, as well as academics and property registration professionals.

“Verra welcomes the efforts of Brazilian authorities”

REDD-Monitor wrote to Verra to ask whether any projects certified under Verra’s Verified Carbon Standard are involved in this police operation, and if so, which projects?

Verra responded with the following statement, which totally ignores my question. It’s from Robin Rix, Chief Legal, Policy and Markets Officer at Verra:

“Verra welcomes the efforts of Brazilian authorities in their investigations into the Voluntary Carbon Market and looks forward to cooperating with them fully.

“The VCM is a critical climate solution where participants have an expressed and continued commitment to enhancing quality. In the last decade, the VCM has developed into an indispensable tool in the fight against climate change. Verra is proud to be part of this market that has allowed much-needed finance to reach decarbonization projects around the world.”

That Verra failed to answer my question came as no surprise. The fact that Verra sees a major police operation in Brazil against Verra-certified projects as an opportunity to promote voluntary carbon markets was a little more surprising. But given Verra’s consistent denial of the problems with carbon trading it’s actually completely predictable behaviour.

On 21 May 2024, Mongabay published a more than one-year-long investigation into two of Brazil’s largest REDD projects. The investigation by Fernanda Wenzel found that the two projects, Unitor REDD+ project and Fortaleza Ituxi REDD project may be linked to an illegal logging scheme.

The Unitor and Fortaleza Ituxi projects are both certified by Verra.

Both of the projects rely on sustainable forest management plans. An analysis by the Netherlands-based organisation the Center for Climate Crime Analysis (CCCA) found inconsistencies between the volume of timber declared to the authorities and the amount of logging that took place estimated from analysis of satellite images.

A future post on REDD-Monitor will look in detail at Wenzel’s excellent investigation.

Ricardo Stoppe Júnior, is the main proponent of the Unitor and Fortaleza Ituxi projects. He’s the largest individual seller of carbon credits in Brazil. He is also the leader of the criminal organisation at the centre of Operation Greenwashing. He is currently on the run.

When Mongabay contacted Verra about CCCA’s analysis, a spokesperson said that Verra needs more details about the analyses before commenting on the findings.

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