Brazilian federal police on Tuesday raided the offices of the consortium responsible for Olympic construction projects at the Deodoro site in northern Rio de Janeiro as part of a major corruption investigation.
Federal police released a statement explaining they carried out search warrants at the headquarters of the consortium, which is made up of the construction firms OAS SA and Queiroz Galvao.
About US$37 million in funding from state lender Caixa Economica Federal to the consortium was blocked pending the investigation, the statement added.
Police also raided the offices of two companies they did not name that is linked to the consortium.
The operation was the latest step in a growing investigation into suspected corruption involving venues and legacy projects for the Olympics, the first Games to be held in Latin America, which is due to start on in August.
Federal prosecutors have in the past said they found evidence of fraud in earth-moving services at the Deodoro venue, which will host Olympic sports such as shooting, equestrian events and the pentathlon.
Queiroz Galvao said in an emailed statement that it was fully cooperating with authorities. It said the increased cost for earth moving at the site was because the amount of material transported exceeded what was originally estimated in the contract.
Last month, federal prosecutors told Reuters they were investigating every Olympic project that used federal funds, which includes works and services at the Olympic Park and the Deodoro area.
Five construction firms are building most of the US$11 billion worth of venues and infrastructure needed for Rio's Olympics.
Mario Andrada, a spokesman for the local Olympic organizing committee, said Tuesday that both Rio 2016 and City Hall demand transparency from all builders they work with.
He said the investigation would not impact building at Deodoro or its readiness for the Games.
"We have nothing to hide about the constructions in Deodoro or anywhere else around Rio," said Andrada. "If the companies did anything wrong, they will have to respond to the law."
The Rio mayor's office said in an emailed statement it was closely following the investigation at Deodoro and that all payments to the consortium remained suspended until the probe is completed.