When Federal Police in Brazil moved on several meatpacking plants on March 17, where meat inspectors were suspected of being on the take, no one could have predicted the probe would shortly be felt as far away as Northern Colorado and other North American locations with JBS USA facilities.

But that’s where it’s landed, after two tumultuous months for the Brazilian beef industry in general and specifically, JBS SA’s worldwide protein empire led by Chairman Joesley Batista. JBS SA dramatically upped the ante in the scandal on May 18 when seven of its executives including the chairman admitted making illegal payments to Brazil’s three most recent presidents, including incumbent Michel Temer.

In the documents, Brazilians learned the JBS seven reached a plea bargain with state prosecutors and agreed to pay a fine of $225 million reals ($67.93 million U.S.) President Temer is denying any wrong doing and refusing to resign.

By Monday, the financial markets and rating agencies were making their concerns known about the brothers Joesley and Wesley Batista bribing the current and past Brazilian presidents. Both Moody’s and Fitch on Monday downgraded the ratings of both JBS SA, and its Greeley, CO-based subsidiary, JBS USA.

Moody’s explained its downgrade this way: “This action follows confirmation by JBS SA that seven executives of the company and its controlling entity, J&F Investments, entered into a plea bargain with the Federal Public Prosecutor’s Office concerning allegations of corruption.”

The rating agency said the downgrade was required because the company now faces increased risks related to future litigation, governance of the company, and liquidity on which “there is current limited visibility.”

Fitch followed Moody’s with downgrades of its own.

JBS in North America might be impacted in a couple of ways. The expected future public offering of JBS USA could be delayed for an extended period of time. Financial analysts also predict that Pilgrim’s Pride Corp, also based Greeley, CO, could be a source of cash as it is 78.5 percent owned by the Batista brothers. Pilgrim’s holds a 20 percent market share in the United States.

JBS SA stocks plunged by 31 percent Monday, but were gaining some back as the week continued, including a 9.53 percent gain on Tuesday. The stock value is also a source of liquidity for the Batista brothers.

At this point, JBS USA  is not the target  of any known criminal investigations in the United States. USDA’s Food Safety and Inspection Service has put in place until May 2018 requirements for sampling all Brazilian raw beef that arrives at U.S. import inspection stations. No beef was U.S-bound from facilities targeted by Brazil’s Federal Police when the scandal began.

A class action lawsuit for shareholders is in the works at the Rosen Law Firm in New York. It alleges shareholders were misled by JBS executives who knew inspectors were allowing meat that was expired, rotten or contaminated with salmonella.

The Batista’s are not, however, clear of Brazilian law enforcement. J&F Investments, which they own, apparently has to work out its own agreement with prosecutors. Loans made to JBS by the National Economic and Social Development Bank’s subsidiary are coming under scrutiny.

JBS SA reported sales of $33.9 billion, of which half were generated by the JBS USA subsidiary. It had a beef production capacity of 29,000 daily in the states and 4,000 in Canada. It has a dozen feedlots in the U.S. and Canada with capacity for almost one million head.  JBS USA also processes 90,000 hogs daily, and through Pilgrim’s 6.6 million birds a day through 25 processing facilities.

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