Reader Denis passes along this story (Portugese) about a family under criminal investigation over manufactured spend.
It’s not clear from the article how laws would have been broken. Google translates the charges as,
Gang, embezzlement, forgery, use of false documents and money laundering.
Apparently they earn only about $740 per month but managed to generate ~ $17 million in credit card charges last year.
Denis explains that “he used a form of wire transfer known in Brazil simply as “DOC”, which is the way most bills (utilities, credit cards, cable….) are paid, but he issued those DOCs to himself or someone else in his family.”
Those funds transfers generally come with a fee, ~ 2.5%, so it’s unclear from the story how he managed to keep his costs low enough to make the credit card rewards worthwhile.
It was the scale of the transactions that tipped off authorities:
What caught the attention of the authorities was totally distant financial transactions of the economic capacity of these people,” says the chief Flavio Porto.
Sort of like an American Express financial review. Only in this case, the authorities aren’t asking for tax returns, they are investigating criminal charges.
What’s really criminal, though, is how tough it can be to use miles in Brazil.
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