The Civil Police of Ceará are investigating an accusation that Ceará Sporting Clube used a contract with the bookmaker Estrela Bet, the club’s sponsor, to issue more than R$45 million in 85 cold notes in 2023.
The notes were canceled up to 72 hours after being issued, after being presented to investment funds as collateral to advance amounts that the club, in fact, was not entitled to receive.
Estrela Bet alleged that the club committed a possible crime with the practice and broke the contract.
Re-elected president of Ceará, João Paulo Silva and eight other people are being investigated on suspicion of gang formation, misappropriation and money laundering in the management of the club, which will play in Series A next year.
HAS Sheet João Paulo confirmed that he issued notes to cancel them later, without this being allowed by the contract and without the sponsor’s knowledge. He also stated that he was unaware of the investigation, which is public, and therefore could not comment on it.
Then financial director, João Paulo assumed the presidency of Ceará in March last year, for a buffer mandate in the midst of a financial crisis. With the club relegated and without cash, he used the contract with Estrela Bet to create support for fundraising, even though the agreement did not involve the issuance of notes and expressly prohibited the anticipation of amounts receivable, as he did.
“There was a need for the fund to have ballast [para a operação]. To satisfy this need for the fund, I issued the notes and then canceled them”, João Paulo admitted to the report, denying that the mechanism is a type of fraud.
Estrela Bet said that it did not recognize the notes and that it repeatedly complained about the practice over the course of a year, having unilaterally broken the contract last April. In the notification obtained by Sheetaccused Ceará of committing a possible crime.
“The recent operations of issuing and canceling invoices and the anticipation of receivables, in the context and manner in which they were carried out, violate contractual provisions, article 422 of the Civil Code and several other legal provisions, of a civil, fiscal and, eventually, even criminal”, said Estrela Bet in the document, dated April 17.
The cancellation occurred after the Court accepted a request for advance evidence presented by opposition counselors in Ceará, who gained access to the canceled notes. They gathered other documents obtained from the decision and handed them over to an independent audit.
The researchers’ report points out that, in 2023 alone, Ceará carried out 40 credit assignment terms, a type of loan, most of them with three funds from the CVPAR management company –which is not investigated–, the club’s former sponsor, backed by for these notes against Estrela Bet, canceled soon after.
In an operation of this type, the transferor (in this case, Ceará) presents documents that attest that he will receive an amount (for example, R$ 1 million) from a beneficiary (Estrela Bet). The fund (CVPAR) advances the money, in this specific case paying R$923 thousand, agreeing to receive, when the sponsor makes the payment, the full amount of R$1 million, plus interest.
What the scheme was like, according to investigation:
- Ceará asks CVPAR for a loan;
- As a guarantee, present a note certifying that you will receive an amount from the sponsor Estrela Bet;
- Based on the notes, CVPAR lends the money;
- Days later, Ceará cancels the note used as guarantee
The contract between Ceará and Estrela Bet, however, expressly prohibited the “assignment/advance of receivables”, according to the sponsor. The document would be known to the fund manager, according to people familiar with the negotiations.
Even so, between April and December 2023, CVPAR accepted 85 notes from Ceará against Estrela Bet, which were subsequently cancelled.
The notes accepted by CVPAR referring to receivables from 2023 and 2024 total R$37 million, but Ceará would only be entitled to receive less than half of that from the sponsor in the period, around R$17 million.
Under the sponsorship contract with Estrela Bet, Ceará would receive R$5 million in the second half of 2023, but in a single operation in June, CVPAR accepted 15 notes from Ceará against Estrela Bet, which totaled R$7.5 million and were presented as referring to sponsorship until the end of the year.
Ceará was advised on all these operations by the law firm Vale & Vieira, which belongs to the CEO and founder of CVPAR, Cláudio Vale Vieira. THE Sheet the office said it was contacted “to act as a consultant in debt structuring, financial raising and access to capital markets”.
For this service, Cláudio Vale’s office was paid around 8.5% of everything Ceará managed to raise with notes from the CVPAR II, Veritá and NSP funds, managed by the company where Cláudio Vale is CEO. In total, Vale & Vieira Advogados received at least R$1.9 million from Ceará in 2023 thanks to this operation.
The fund manager told Sheet that “the operations are legitimate, regularly supported within the credit eligibility policy set out in the regulations and were duly settled” and praised Ceará as having a “regular history of settled operations, having sufficient budget and revenue to honor its commitments”.
Due to debts with other clubs, FIFA imposed restrictions on Ceará this season to register athletes. Even so, the club managed to gain access to Series A, with CVPAR as a sponsor in the last round.
When asked if it was aware that the notes it received were later cancelled, CVPAR said that the “possible cancellation, if not communicated, is not known”, without explaining whether communication had taken place. “However, the operation remains backed by a contract and other guarantees.”
João Paulo said, in a meeting on April 30, that the funds were aware of this. Now, in the report, he stated that CVPAR only found out about the practice this year, after the facts narrated in the report and before the speech at the assembly.
“We highlight that the origin and solvency of the securities traded are the responsibility of the transferor of the transaction, which in this specific case was the CSC, from whom the creditor may demand compliance with the repurchase obligation in the event of defects and/or questions”, he states the company in note.
HAS SheetEstrela Bet said that the contract was broken “formally and within the contractual provisions previously established and communicated to the club”, reinforcing that contractual confidentiality prevents the disclosure of specific details.
