Two men arrested in bribery probe tied to Rio Olympics subway

SAO PAULO (Reuters) - Brazilian federal police on Tuesday arrested two people accused of taking bribes in return for infrastructure contracts in Rio de Janeiro, including the construction of a new subway line for the 2016 Olympic Games.

The police operation targeted Luiz Carlos Velloso, a former undersecretary of transportation for the state government, and Heitor Lopes de Souza, a director for subway operator Riotrilhos, police sources said. Their lawyers could not be reached immediately for comment.

The two men will be charged with money laundering and taking bribes, according to a police statement. Bribes were often tied to fraudulent contract extensions for the subway line, police said.

The subway connecting downtown Rio to the Olympic Park in Barra de Tijuca was inaugurated days before the Games started in August, after a series of delays and budget overruns doubled the cost to nearly 10 billion reais ($3.2 billion).

The police action is a part of the sweeping "Operation Car Wash" investigation into corruption and political kickbacks throughout Brazil, which has snared dozens of senior politicians and business executives over the past three years.

($1 = 3.16 reais)

(Reporting by Rodrigo Viga Gaier and Pedro Fonseca; Writing by Bruno Federowski; Editing by Jeffrey Benkoe)