UPDATE 3-Ex-CEO of Brazil's Braskem arrested on U.S. corruption charges

The former chief executive of Brazilian petrochemical company Braskem SA was arrested on Wednesday in New York on charges that he took part in a scheme to pay millions of dollars in bribes to officials to secure government contracts. Jose Carlos Grubisich was charged with conspiracy to violate a U.S. foreign corruption law and with money laundering conspiracy in a newly unsealed indictment in Brooklyn federal court.

Grubisich was arrested in the morning at New York's John F. Kennedy Airport and is expected to appear in federal court in Brooklyn later in the day, according to John Marzulli, a spokesman for the office of U.S. Attorney Richard Donoghue. Grubisich's lawyer, Daniel Stein of the firm Mayer Brown, could not immediately be reached for comment.

Grubisich led Braskem from about 2002 to 2008 and went on to hold various positions with its affiliated construction company Odebrecht SA. He later became CEO of pulp maker Eldorado Brasil Celulose SA, which he left in 2017. In the indictment, prosecutors said Grubisich and other Braskem and Odebrecht employees took part in conspiracy to divert about $250 million into a secret slush fund, which was used in part to bribe officials. The scheme ran from about 2002 to 2014, according to the indictment.

As CEO of Braskem, Grubisich helped cover up the scheme by falsifying the company's books and signing false certifications to the U.S. Securities and Exchange Commission, prosecutors said. The prosecutors said in a court filing that Grubisich should not be released on bail because he poses a high risk of fleeing the country.

Braskem and Odebrecht agreed in 2016 to pay a combined $3.5 billion in a settlement with U.S., Brazilian and Swiss authorities to resolve bribery allegations. The U.S. Justice Department said at the time that about $2.6 billion would come from Odebrecht and $957 million from Braskem, and that most of the money would go to Brazil.

Both companies pleaded guilty to U.S. criminal charges as part of the deal, which emerged from a three-year corruption investigation in Brazil dubbed "Operation Car Wash." The investigation, which centered on payments made to state-owned oil company Petróleo Brasileiro S.A., known as Petrobras, led to dozens of arrests and political upheaval in Brazil, contributing to the 2016 ouster of President Dilma Rousseff.