REPRESENTATIVES of one of Panama’s largest law  firms,  Mossack Fonseca (MF)  havebeen charged in Brazil with  money laundering and corruption.

Two employees were arrested on Wednesday, Jan.27  and three more are at large.

The arrests are linked to "Lava Jato" operation which has also resulted in the arrest of Odebrecht President Marcelo Odebrecht, reports La Prensa.

One of the Mossack employees who was arrested, María Mercedes Riaño, is accused of destroying and hiding documents.

An e-mail obtained by prosecutors indicates that she removed due diligence documents and client records from the office.

Mossack Fonseca issuedd a statement claiming that the employees are being wrongly charged and that the firm has no connection to the suspects in the Lava Jato investigation.

At a Wednesday press conference, prosecutor Carlos Fernando dos Santos Lima said that there is evidence that Mossack and Fonseca was "a money-washing machine."

According to Brazilian media, authorities also arrested Nelci Warken. He is the owner of real estate linked to the offshore company Murray Holding that was created by MF and allegedly used to launder money.

The Attorney General said that there is strong evidence that Warken was a "puppet" in the laundering scheme, as he lacks the means to afford the apartment or handle the large amounts of money linked to Murray Holding.

"He doesn't even have the documents to travel abroad," said the prosecutor.

According to investigations, the construction company OAS used the Solaris,building linked to Murray Holdin,, where former President Luiz Ignacio Lula da Silva also has an apartment, to conceal bribes paid to officials with the state oil company Petrobras.

Petrobras executives are accused of receiving millions of dollars in bribes from several contractors, including Odebrecht, whose subsidiary in Panama is the largest recipient of state contracts. Veja.com said the latest development in the Lava Jato case came after it was discovered that the sister of João Vaccari Neto, former treasurer of the Workers Party, allegedly used money from bribes to buy an apartment in the Solaris building.

Vaccari's wife, Giselda Rousie de Lima, also owns a unit in the building that is registered in the name of Murray Holdings.

Prosecutors have linked a number of companies created by MF to Petrobras officials. These include Milzart Overseas Holdings, controlled by former Petrobras Director Renato Duque, and Backspin Management, Daydream Properties, Tropez Real Estate and Dole Tec, all linked to former Petrobras Manager Pedro Barusco. Another company, Mayana Trading Corp., is linked to businessman Mario Goes.

Barusco and Goes have cooperated with investigators in the probe.

Judge Sergio Moro said that there is evidence that "Mossack Fonseca provided services for the opening of offshore societies, and at least four agents were involved in a scheme to launder money."

Brazilian authorities made the allegations based on e-mails sent by MF officials.

According to the e-mails, there were orders made to destroy crucial documents linking the firm to the creation of the documents, including messages sent by Riaño Quijano.

Sources said that Riaño Quijano is in Panama and was at the headquarters of MF on Wednesday.