Pressure mounts on central bank chief in fraud scandal

The survival of Brazil's central bank president Henrique Meirelles in his post came under increased pressure Thursday when new allegations emerged in an embarrassing fraud and tax evasion scandal, local press reported. Local weekly magazine Veja reported that Meirelles had transferred some US$50,000 to an undeclared Goldman Sachs account in New York before sending the money to an account held by offshore currency operator Biscay Trading, which is being investigated for alleged money laundering. Veja and other magazines have reported that Meirelles and Banco do Brasil's boss Cássio Casseb are being probed by federal investigators for fraud and tax evasion. The central bank's former monetary policy director Lula Augusto Candiota resigned last week due to similar accusations. Meirelles has said he is willing to go before the Senate to testify about his personal finances and earlier this week the Senate did say it wanted to hear Meirelles'' version. In response to Veja's latest claims Meirelles stated that the Goldman Sachs account was not required to be declared on his tax statements because it was active only for a short period of time, between August and December, 2002. He also added that the transfer to the Goldman Sachs account was a payment for services and that he could not know where the money would be directed. The central bank also came out with a statement saying the operation was legal and that the funds in question had been taxed both in the US and in Brazil. Brazil's President Luiz Inácio Lula da Silva has asked both Meirelles and Casseb to stay on their posts while several opposition parties have demanded their heads.