By Karen Freifeld
NEW YORK (Reuters) - Brazilian congressman Paulo Maluf lost a bid to dismiss charges filed against him in New York in 2007 for allegedly stealing $11.6 million from a Brazilian public works project when he was mayor of Sao Paulo.
Maluf and his businessman son, Flavio, who also was charged, sought a court order to toss the indictment accusing them of participating in a kickback scheme in which money was run through a New York bank account and then transferred offshore.
The Malufs also wanted the judge to lift Interpol "red notices" requesting they be arrested if they traveled outside Brazil.
Brazil does not extradite nationals, the district attorney has said, and the Malufs have never come to New York to face the charges.
The funds were among $140 million that went through the Manhattan bank account tied to Maluf, New York authorities have said.
In a decision filed Wednesday, New York state Supreme Court Justice Marcy Friedman refused to throw out the Manhattan case.
The Malufs have failed to establish that they are entitled to the "extraordinary relief," the judge said, dismissing their petition for a writ of prohibition.
The allegations involve an inflated invoice scheme from 1993-1996 relating to construction of a highway.
The funds ran through Safra National Bank in New York to accounts in the Bailiwick of Jersey in the British Channel Islands that were controlled by Paulo Maluf, according to court papers.
Some of the funds were returned to Brazil for political campaign contributions and personal expenses, the papers say. Some were used to buy watches in New York City.
Bryan Skarlatos, a New York attorney who represents the Malufs, said there was an ongoing prosecution in Brazil involving the same allegations.
"I'm sure he intends to appeal" the judge's decision, Skarlatos said of the New York ruling.
The Malufs and three others face over a dozen criminal counts in the case. The most serious charges carry up to 25 years in prison.
Paulo Maluf is a member of the Brazilian Congress. He has been mayor of the city of Sao Paulo and governor of the state of Sao Paulo. He was jailed briefly in Sao Paulo in 2005 on charges of money laundering.
The case is In the matter of Paulo Maluf and Flavio Maluf, 100807/2010, New York state Supreme Court (New York County).
(Reporting By Karen Freifeld; Editing by Gary Hill)