Councilman Freed Amid Bitcoin Scam Probe Targeting Elders

Brazilian councilman associated with Bitcoin frauds targeting the elderly was put on bail by the STJ as a fraud investigation in Xaxim continued.

‘A Brazilian councilman detained in a high-profile swindle involving elderly targets has won a provisional release. 

His habeas corpus appeal was granted by the Superior Court of Justice (STJ) on September 15, 2025. This is a case of internet fraud that is connected with Bitcoin transactions.

The local politician was accused due to the exposure of a crime gang by Operation Entre Lobos, who stole money belonging to more than half a thousand senior citizens. The team took advantage of bank review suitcases to swindle victims.

Complex Crime Assails the Elderly, who are vulnerable.

The gang victimized mostly elderly women with false claims of the law to deceive the victims. 

They embezzled legal credits on cents of the actual amounts. Secure Proton Mail and Bitcoin wallets are some of the highly sophisticated methods presented in court records. These were utilities that assisted in concealing their online history.

The victims lost through the Santa Catarina Public Prosecutor (MPSC) outline that victims lost more than 97% of the compensation ordered by the court. One of them involved a victim owing R$146,327 but got only R$2,500. Another lost over R$115,000. 

The plan spanned several shell companies and lawyers who had been alleged to have been complicit in the scheme.

Public Prosecutor Edisson de Melo Menezes encouraged all the victims to testify. His office tries to trace the entire scope of crime and trace the culprits. Operation Entre Lobos is still in operation.

Court Orders Release under Caution.

The appeal of the councilman was analyzed by Justice Ribeiro Dantas. He agreed to substitute preventive detention with other measures. 

Nevertheless, judges are required to watch over accused persons one by one to prevent recidivism. The ruling reflects judicial restraint in the course of investigations.

STJ decision compels the lower courts to establish new rules of law. Systemic weaknesses are seen through the misuse of lawsuits. 

That proves a veil of disguise for scams by the group. The case reveals a criminal network of a combination of legal and digital deceit.

Law enforcers are still investigating the scope of the fraud and the involvement of the lawyers concerned. Some of them are charged with violations of law, ethics, and fraud.

The case serves as an eye-opener into the shadowy overlap of crypto and elderly abuse in Brazil. 

It emphasizes the emergent appeals to have more stringent measures to safeguard the vulnerable groups against new methods of cyber-fraud.