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Brazil police arrest three for alleged fraud in Copel contracts

SAO PAULO, June 5 (Reuters) - Brazilian police arrested three people on Monday as part of an investigation into fraudulent contracts signed by state-owned power utility Cia Paranaense de Energia.

In a statement, the Paraná state government said police were also bringing in five other people for questioning and serving two search-and-seizure warrants.

The probe is the latest in a series of corruption scandals ensnaring senior politicians and major players in corporate Brazil from engineering firms to meatpackers and financial institutions.

Seven unnamed businessmen and one former employee of Copel, as the utility is known, are under investigation, according to the police statement.

That employee allegedly inflated contract values in order to benefit other companies, driving losses totaling 7 million reais ($2.2 million), the government added.

Media representatives for Copel did not immediately respond to requests for comment.

($1 = 3.2550 reais) (Reporting by Pedro Fonseca and Luciano Costa; Writing by Bruno Federowski; Editing by Bernadette Baum)