BRAZIL Trends and Developments Contributed by: Flávia Leardini, Paula Moreira Indalecio, Rogério Taffarello and Philippe Alves do Nascimento, Mattos Filho
Public Sector Fraud and Social Security Schemes Fraud in public sector programmes, particularly the federal social security system (INSS), has emerged as a major enforcement focus. Operations such as the “Overclean” probe have uncovered billion-reais schemes involving the use of shell companies, pub - lic servants, and private sector actors to defraud the INSS. These investigations have resulted in the arrest of dozens of individuals and the freezing of millions in misappropriated funds. The schemes often involve the creation of fake benefit claims, manipulation of payroll systems, and collusion between insiders and external service providers. Companies that interact with public systems should reinforce vendor due dili - gence, implement segregation of duties, and deploy advanced anomaly detection tools to mitigate the risk of involvement in fraudulent activities. The govern - ment’s commitment to combating public sector fraud is expected to drive further regulatory reforms and enforcement actions in the coming years, including the digitalisation of benefit systems and the integra - tion of biometric verification. Cyber-Enabled Financial Crime and Digital Security The rise of cyber-enabled financial crime presents new challenges for regulators and businesses alike. The use of AI in financial fraud, including deepfake technology, automated phishing, and synthetic iden - tity creation, has increased the complexity and scale of attacks. Incidents involving the PIX instant payment system, such as account takeovers and unauthorised transfers, have prompted the Central Bank to require stronger authentication measures, including liveness detection, behavioural biometrics, and multi-factor authentication. Financial and payment institutions are required to deploy advanced security measures, including adver - sarial testing, rapid response protocols, and regular employee training. The Central Bank has also issued new guidelines on incident notification and the man - agement of cyber risks, requiring institutions to report significant breaches within 24 hours. Regulatory expectations are evolving, with a focus on proactive risk management, incident reporting, and collaboration with law enforcement. The increasing sophistication of cybercriminals has prompted continuous investment
in digital security, the adoption of zero-trust architec - tures, and the use of AI-driven anomaly detection. The São Paulo State Police has established a dedicated cybercrime unit, and the Federal Police has increased its co-operation with Interpol and Europol to combat transnational cyber threats. In addition, the National Data Protection Authority has begun to play a more active role in overseeing data breach responses and the protection of personal information in the financial sector. International Co-operation and Data Protection Enforcement agencies in Brazil are increasingly col - laborating with their international counterparts to investigate and prosecute complex cross-border cases. The Federal Police, Receita Federal , and the CGU have participated in joint operations with agen - cies from the United States, the European Union, and Latin America, sharing intelligence and co-ordinating enforcement actions. The integration of AI tools and data analytics has enhanced the ability to detect illicit activities that span multiple jurisdictions, but also raises challenges related to data protection and legal privilege. The General Data Protection Law ( Lei Geral de Proteção de Dados ) imposes strict requirements on the handling of personal data, and companies must ensure compliance when responding to cross-border requests. The management of parallel proceedings, especially in cases involving the US Department of Justice or European authorities, requires careful co- ordination to avoid conflicts of law. Outlook for 2026 Looking ahead, Brazil’s white-collar crime enforce - ment landscape will continue to evolve in response to emerging risks and global trends. Sustained action is expected in the areas of sports betting, capital markets, environmental protection, and cybercrime. Regulatory scrutiny of investment funds, payment systems, and high-risk sectors will intensify, with greater reliance on data analytics, and international co-operation. The trend toward multi-agency oper - ations and the use of AI in enforcement is likely to accelerate, with authorities investing in new technolo - gies and cross-border partnerships. Businesses must prioritise governance, evidence- ready compliance, and robust incident response
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