Brazilian prosecutors charge Lula with money-laundering

Former Brazilian president Luiz Inácio Lula da Silva was formally charged on Wednesday with money-laundering and other crimes over an alleged bid to conceal ownership of a luxury apartment, in a move set to intensify the political crisis gripping South America's biggest country.

The decision by São Paulo state prosecutors follows the former president's questioning by federal prosecutors last Friday as part of a separate investigation into corruption at Brazil's state-controlled oil giant Petrobras.

It is the first time Lula, who left office in 2011 with stratospheric poll ratings after eight years in power, has been formally charged with wrongdoing.

Among the 15 other people charged in connection with the luxury triplex apartment in the beach resort of Guarujá are Lula's wife Marisa and his eldest son Fábio Luiz.

Those charged also include Léo Pinheiro, the former president of OAS, one of Brazil’s biggest construction companies, and the former treasurer of Lula’s Workers’ Party João Vaccari, who was sentenced last year to 15 years in jail for his role in the Petrobras scandal.

Prosecutors believe the apartment was held in OAS’s name for Lula’s family.

Evidence has emerged that Lula’s wife Marisa oversaw extensive renovations of the property, including the installation of an internal lift, with the cost being picked up by OAS.

OAS was forced into bankruptcy last year after its senior management was indicted in the Petrobras inquiry.

Following their questioning of him last week, federal prosecutors said there are strong indications that Lula materially benefited from the corruption scheme within Petrobras.

Pinheiro, a close friend of Lula, has already been sentenced to 16 years in jail for his role in the scheme.

He is reportedly negotiating a plea-bargain agreement with prosecutors in which he will provide information on wrongdoing by Lula and other politicians in return for a reduced sentence.

Lula’s defence

Lula’s defence admits his family had an option to buy the apartment but decided not to exercise it.

His lawyers claim the charges are part of a systematic campaign to destroy the image of the former union leader, who remains one of Brazil’s most powerful politicians and is still considered one of the frontrunners for the 2018 presidential election.

The closing of the legal net around Lula has intensified the political paralysis afflicting the government of his protégée and Brazil's president Dilma Rousseff, leaving it unable to tackle a deepening economic crisis.

Already facing impeachment, Ms Rousseff was called on to resign this week by opposition leader Aécio Neves, whom she defeated in 2014’s presidential election.

He said the move would be “a gesture of greatness” for the country.

Neves himself has already been named by four different defendants in the Petrobras inquiry as being a beneficiary of various corruption schemes.

He denies any wrongdoing.