Operation in Santa Catarina targets bid rigging and corruption in public contracts

Authorities in Santa Catarina, Brazil, have launched an operation targeting an alleged scheme of bid rigging, corruption, and money laundering related to public management system contracts. The operation, named "Gaiola Digital" (Digital Cage), was initiated by the Public Prosecutor's Office of Santa Catarina (MPSC) and involved the execution of 17 search and seizure warrants.

The warrants were served at residences and a company under investigation across multiple municipalities, including Blumenau, Rio do Sul, Lages, Penha, Balneário Camboriú, Canoinhas, and Irani. The case is currently under judicial seal, and the identities of those investigated, the involved municipalities, and the target company have not been disclosed by the MPSC.

According to the MPSC, the investigated group allegedly created a structure to manipulate public tenders for computerized systems used by municipal governments. Investigators claim the group approached public officials before bidding processes, influenced the drafting of tender documents, and included technical clauses to restrict competition, thereby favoring a predetermined company.

The investigation also examines allegations of improper payments made to secure, maintain, and renew public contracts. The MPSC indicated a division of labor within the group, with specific units responsible for liaising with public officials, preparing technical documents, managing payments, and moving funds to conceal their origin and destination. Evidence of money laundering was reportedly found through fragmented withdrawals and other financial operations used to create a clandestine fund for bribes. Hundreds of bank transactions totaling millions of reais, deemed incompatible with regular business activities between 2022 and 2026, have been identified.