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Investigators focus on Miami investor in possible bid-rigging for 2016 Brazil Olympics

Emily L. Mahoney and Malu Gaspar, Miami Herald on

Published in Olympics

After the vote that decided Rio de Janeiro would host the 2016 Summer Olympics, the Brazilian city erupted in celebration as the government declared a state holiday and wild parties flooded Copacabana Beach.

It was a historic first for South America, which had never hosted the Olympics.

But that victory has recently been tainted by whiffs of scandal, with French investigators on the trail of a possible bribery scheme right out of the Panama Papers -- featuring a Russian bank account, British Virgin Islands-based holding company and a murky $1.5 million wire transfer three days before Rio was selected.

One man caught in the crosshairs is a Brazilian national, shrouded in mystery, who has long straddled two worlds: contracting mogul in Rio, elite investor in Miami.

Arthur Cesar de Menezes Soares Filho -- or "King Arthur," as he is known in Brazil ––has intermittently lived in Miami for decades, shelling out millions for valuable properties and opening businesses, according to public records. But his life of luxury could be imperiled by ongoing, intensifying investigations.

French prosecutors aren't his only problem. Brazilian investigators are picking off people in Soares' circle one by one on corruption charges as part of a separate investigation.

Soares did not respond to messages sent through his business partner and the gatekeeper at his residence asking for comment. Lawyers tied to him through business filings or court records either declined to comment or did not respond to calls and emails describing the nature of this story.

Soares is a man who could easily blend into the fabric of Miami, a city teeming with rich foreign nationals and a haven for deposed leaders and others looking for breathing room when law enforcement in their home countries turns up the heat.

Most recently, former Panamanian President Ricardo Martinelli was arrested at his home in Coral Gables on corruption charges, beginning extradition proceedings.

In Rio, Soares was the top state government contractor, providing things like cleaning services, security and prison food. He was the right-hand man to Rio state Gov. Sergio Cabral. During Cabral's time in office, Soares' profits boomed with about $960 million in signed government contracts, according to a March report by Brazilian newspaper Folha de Sao Paulo.

Then Cabral's world caved in. First he stepped down as governor, bowing to pressure from a discontented public, and then he was arrested on bribery charges. In hopes of reducing his sentence, Cabral offered up dirt on his associates, including Soares.

Cabral promised to reveal details of a meeting held in 2009 with Soares, Brazilian President Luiz Inacio Lula da Silva and Mayor Eduardo Paes, according to three sources who have seen the proposal document. The alleged purpose of the meeting: to authorize Soares to bribe a member of the International Olympic Committee to vote for Rio as the 2016 host city.

Prosecutors did not accept Cabral's offer. The investigation of that meeting continues, however.

Business documents filed with the state of Florida, court records and real estate deeds provide a glimpse of Soares' life in Miami. But finding the man himself -- a man with a reputation for extreme discretion -- is like chasing a ghost. An agent who leased him restaurant space says he never met Soares. Neither did the person who bought Soares' $2.1 million house on Key Biscayne.

Even a Miami lawyer who represented Soares' companies in a lawsuit said he never spoke to his client.

The Rio Olympic scandal started as an international investigation into alleged Russian doping and corruption among leaders of the International Association of Athletics Federations. But as investigators began to dig, they stumbled upon suspicious dealings surrounding the votes that chose the cities for the Summer Games in 2020 (Tokyo) and 2016 (Rio), according to reports published in The Guardian and Le Monde.

France, which has a powerful financial investigative body, was then assigned to find the truth. The investigation is still in its early stages, but has already determined that a British Virgin Islands-based offshore company tied to Soares was involved in a chain of suspicious wire transfers, according to Le Monde.

According to Le Monde, Soares allegedly used the offshore to pay $500,000 to Papa Massate Diack, the son of Lamine Diack, a Senegalese IOC voter and then the president of the IAAF, a source close to the French investigation said. That money was then transferred to a Russian account.

Le Monde reported that three days before the IOC's vote on the 2016 host city, Soares' company transferred an additional $1.5 million to Papa Massate. Investigators are following the money from there, with the French publication reporting that -- on the day of the vote -- about $300,000 went to a committee member in a leadership role.

Rio won by a landslide.

Today, Lamine Diack is in French custody on charges of corruption and money laundering related to the IAAF matter. An international arrest warrant has been issued for his son, according to the Guardian.

Soares is under even more intense scrutiny at home for his connections to Cabral, the imprisoned ex-governor, as federal investigators are looking into allegations that the businessman bribed his way to the top of the government's list of contractors. He and Cabral both had summer homes in the same seaside neighborhood -- as did several other state officials and businessmen who have been arrested, according to Brazilian newspaper O Globo.

Among the accusations: Folha de Sao Paulo reported last year that Soares paid more than $300,000 to the office of Adriana Ancelmo, Cabral's wife.

Soares said in sworn testimony that the payment was for legitimate legal services that Ancelmo, a lawyer, provided to him, according to court records.

Cabral's arrest shook the nation at a time when the list of Brazilian politicians not implicated in corruption is dwindling. He was only the latest to fall prey to the country's wide-ranging national anti-corruption investigation, Lava Jato, or Operation Car Wash, named for a gas station used by criminal rings to launder money.

In Brazil, Soares has a history of avoiding the spotlight. In conversation, he is said to speak softly and politely. Before he sold his business in Rio, he spent much of his time in its headquarters, a plain building with no outstanding features beyond its high walls and security worthy of a bunker, in a lower-middle class neighborhood.

But in Miami, his elusive presence is almost phantom-like.

A gatekeeper confirmed that Soares lives in a $5.3 million luxury villa on Key Biscayne, part of the Oceana complex on the eastern side of the island. On its website, the development is advertised as "ultra exclusive" with a "discreet environment." Porsches and Mercedes-Benzes drive in and out of the gates while unannounced visitors are turned away.

Those who know Soares said he enjoys the finer things. He used to cruise his 70-foot yacht through the ocean near his beachside home in Brazil and owned a private jet to go back and forth from Miami, according to former associates. He drinks Cristal Champagne and smokes Cohiba cigars. He has gone to Cher concerts in Las Vegas and Miami.

In Miami, Soares frequents Casa Tua in Miami Beach, according to a former associate, a hideaway that reflects his taste for luxury and mystery.

Branded a place to "escape the frenzy of South Beach," the upscale Italian restaurant is marked only by a small sign on the valet cart and is far removed from the sidewalk, behind a small gate, kept closed. The patio is encircled by high shrubbery that only lets the candlelight shine through, for a private, exclusive atmosphere.

A manager at Casa Tua confirmed that he was a "familiar face" who drops in "sometimes."

According to Florida business records and reporting by Folha de Sao Paulo, one of his earliest Florida businesses was a bayfront Brazilian steakhouse called Porcao, a local favorite inside the Four Ambassadors until it closed. The Miami location was modeled after Soares' first Porcao steakhouses in Brazil, including a Rio location that was a prime spot for the politically connected.

Robert Garcia, a longtime employee and manager in the Four Ambassadors' leasing office, remembers other owners, remembers managers, remembers the servers, but not Soares.

"I've been around here for many years and I've never met him," he said.

Soares' initial business presence in Miami was minimal, with just a few Florida companies to his name in the mid-1990s. Today, he is tied to 28 companies in Florida, according to Division of Corporations records -- some with names nearly identical to companies he owned in Rio.

Ana Paula Santiago, a business associate who is also from Rio, said all of the businesses are investment companies.

"Some of them (invest) in real estate, some of them invest in health care, each one has a particular thing," she said, also confirming that all of Soares' active businesses are headquartered in the same office.

Santiago said she would forward an interview request to him. Nothing came of it.

Soares is listed as registered agent or manager on some -- but not all -- of the businesses connected with him. Shruti Shah, a forensic accountant and vice president of the anti-corruption nonprofit Transparency International USA, said that's legal but makes it difficult to get a comprehensive look at his companies.

"The problem is you can open companies without having to disclose who really beneficially owns these companies," she said.

Soares' holdings also extend to valuable Miami real estate, and show an affinity for expensive properties near the ocean.

In 2004, one of his companies bought a five-bedroom house on Key Biscayne for $1.5 million, and then sold it for $2.1 million six years later, according to Miami-Dade Property Appraiser records.

The man who now lives in the white, glass-paned house with his family said he never met Soares because the sale was handled completely through real estate agents.

In the following years, a company managed by one of Soares' businesses purchased a shopping center in Deerfield Beach for $5.8 million. Another of his companies then spent $2.2 million for a three-bedroom condo. That property was later transferred to a different company, also located at Soares' headquarters, according to Property Appraiser data.

An analysis of Soares' business activity in Brazil found he is tied to at least 44 companies there, with flurries of business name changes, old companies being dissolved and new ones being created.

For example, just weeks before Operation Car Wash began in March 2014, Soares sold a 95 percent stake in his biggest business group to a company called Rise International. Rise immediately renamed the group and changed its own address to a location in the Bahamas, according to a Brazilian corporation registry document.

That same pattern holds true for his businesses in Miami: In 2014, three of his companies were rendered inactive. At the same time, four new companies appeared under his name, according to business records.

Shah said this behavior makes it difficult to track Soares' wealth.

For now, investigators in Brazil and France are reportedly sharing documents and information, trying to chip away at a case against this mysterious man who knows how to stay under the radar on two continents.

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(Kevin Hall of the McClatchy Washington Bureau contributed to this report. Malu Gaspar reported from Rio de Janeiro. Emily L. Mahoney reported from Miami.)

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(This report is collaboration between the Miami Herald and the Brazilian magazine Piaui.)

(c)2017 Miami Herald

Visit Miami Herald at www.miamiherald.com

Distributed by Tribune Content Agency, LLC.

 

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