CORRECTED-UPDATE 7-Powerful Brazil CEO arrested in Petrobras graft probe
(Corrects name of prosecutor in fourth paragraph to Lima from )
By Caroline Stauffer and Walter Brandimarte
SAO PAULO, June 19 (Reuters) - Brazilian police on Friday arrested Marcelo Odebrecht, the head of Latin America's largest engineering and construction company Odebrecht SA, and accused his family-run conglomerate of spearheading a $2.1 billion bribery scheme at state-run oil firm Petrobras.
Police also apprehended Otavio Marques Azevedo, CEO of Andrade Gutierrez, Brazil's second-largest builder, as the probe into corruption at Petrobras spread to the highest level of Brazilian business.
Odebrecht, Azevedo and other top executives arrested in Sao Paulo were driven to the airport in a van and flown to the southern city of Curitiba, where Brazil's largest-ever corruption scandal is being investigated.
A lead prosecutor, Carlos Fernando dos Santos Lima, said he had "no doubt" Odebrecht and Andrade Gutierrez led what he called a "cartel" that overcharged Petrobras for work and passed on the excess funds to executives and politicians.
The arrest of 46-year-old Odebrecht, who has personal ties to former President Luiz Inacio Lula de Silva, could bring the scandal closer to the political heart of the ruling Worker's Party.
"There is a larger connection between Lula and Odebrecht and we see (Odebrecht's) possible indictment as a big risk," said Cameron Combs, Latin America researcher with Eurasia Group.
President Dilma Rousseff, who ran the board of Petrobras during Lula's presidency, has denied knowledge of corruption and urged a thorough investigation. Neither she nor Lula have been implicated. Continuación...