Brazil’s federal police have alleged former president Jair Bolsonaro received cash from the 70,000-dollar (£55,000) sale of two luxury watches he received as gifts from Saudi Arabia while in office, posing another potential blow for the embattled far-right leader.

Earlier in the day, officers raided the homes and offices of several people purportedly involved in the case, including a four-star army general. Mr Bolsonaro has denied any wrongdoing involving the gifts.

A federal police officer said the force is seeking authorisation to access the personal banking and financial information of Mr Bolsonaro. The officer added that the federal police had asked for help from the FBI.

Mr Bolsonaro’s lawyers said in a statement that he would authorise Brazil’s judiciary to have access to his banking records.

“President Bolsonaro has never embezzled or misplaced any public assets,” it said.

The case adds to the legal jeopardy facing Mr Bolsonaro for activities while he was president.

He is also being investigated in relation to a rampage by his supporters in the national capital after he left office as well as acts during the presidential election campaign he lost last autumn.

Brazil requires its citizens arriving by plane from abroad to declare goods worth more than 1,000 dollars (£787) and, for any amount above that exemption, pay a tax equal to 50% of their value.

The jewellery would have been exempt from tax had it been a gift from Saudi Arabia to Brazil, but would not have been Mr Bolsonaro’s to keep.

“The amounts obtained from these sales were transformed into cash and then became personal assets of the former president through middle people and without entering the formal banking system,” federal police contend, according to an order issued by Supreme Court Justice Alexandre de Moraes.

The judge said police believe the strategy of the suspects was “hiding the origin, location and ownership of these amounts”.

According to the investigation, Mr Bolsonaro’s aide, Lt Col Mauro Cid, in June 2022 sold to a store in the US a Rolex watch and a Patek Philippe watch given as a gift by the government of Saudi Arabia in 2019 for a total of 68,000 dollars (53,000), the judge’s order said. The money was allegedly transferred to the bank account of Lt Col Cid’s father the same day.

In March 2023, when investigations were already under way and the federal police requested Mr Bolsonaro return two sets of jewellery gifts, his lawyer, Frederick Wassef, repurchased the Rolex watch in Miami and turned it over to Brazilian authorities in April, the order said.

Both Mr Wassef and Lt Col Cid’s father were targets of the search and seizure warrants issued on Friday, along with a close adviser to Mr Bolsonaro responsible for returning the sets of jewellery.

Earlier this year, Mr Bolsonaro was ruled ineligible to run for office until 2030 after a panel of judges ruled he abused his power and cast unfounded doubts on the country’s electronic voting system.

He also is facing trial in several other cases that could put him behind bars.

One of the investigations revolves around Lt Col Cid’s arrest in May for allegedly falsifying Covid-19 vaccine cards for his own family and Mr Bolsonaro’s family during the pandemic.