Police say a Brazil construction group ran a payment layer for illegal lottery cash, with more than 1,000 suspicious transactions flagged by Coaf

Brazilian federal police and the state anti-organized-crime unit Gaeco say a Rio Preto construction company and its owners built the financial infrastructure used to give criminal proceeds a veneer of legitimacy. For PSPs and acquirers, the interesting part is not the gambling itself but the payment orchestration: thousands of card terminals, shell companies, nominees, and a transaction trail that moved money away from game-of-chance outlets and into linked businesses.

1. Police arrested five people in the operation: four in Rio Preto, in the state of SP, and one in Campo Grande, MS. Two other suspects in Rio de Janeiro remain at large. Federal Police and Gaeco carried out 11 search-and-seizure warrants across three Brazilian states: MS, RJ and SP.
2. Investigators identify businessman Alessandro Malavasi and his son, Natan Malavasi, owners of a high-end construction company in Rio Preto, as the alleged leaders of the group. Their lawyer, Luiz Fernando Volpe, said the case is under seal and that the defense has not yet had access to the investigation, so he would not comment.
3. According to prosecutor Tiago Dutra Fonseca, the group was not directly operating illegal gambling. Their role was to create and manage a financial structure capable of making criminal money look legitimate. The prosecutor described the setup as built from Rio Preto to Rio de Janeiro, with the corporate command concentrated in Rio Preto and the criminal proceeds traced through the structure over roughly 900 km.
4. The alleged scheme used thousands of card machines installed at jogo do bicho and videobingo betting stalls, connected to shell companies and entities registered to laranjas (nominees). Some of those companies were in the names of people with no financial capacity, including beneficiaries of social programs, yet they were shown as responsible for million-level transaction flows.
5. The funds were split into smaller movements and then routed to companies linked to the suspects. Coaf, Brazil’s financial intelligence unit, identified more than 1,000 suspicious transactions. The investigation also says the accounts analyzed moved money between January 2019 and March 2026.

The label Gaeco used for this is telling: “outsourced” money laundering. For high-risk payment providers, that usually means the obvious merchant category is only half the story; the real risk sits in the payout chain, the nominee-owned entities, and the terminal fleet used to industrialize cash-in, card-in, and fund dispersion.