Republican congressman George Santos has admitted to theft and signed a deal with Brazilian authorities to drop the criminal charges in a 2008 case.
As part of the deal, Mr Santos has been given 30 days to pay restitution and fines for the case to be dropped.
He is still facing more serious federal charges in the US of fraud, money laundering and theft of public funds.
Mr Santos has pleaded not guilty to the US federal charges.
The 34-year-old lawmaker, who was elected to the House of Representatives in November, has been dogged by accusations of falsehoods and fraud throughout his brief career on Capitol Hill.
Among those were allegations that Mr Santos spent about $700 (£560) using a false name and stolen cheques in the city of Niterói, near Rio de Janeiro in Brazil, to buy items at a shop including a pair of trainers in 2008, when he was 19.
The case had been suspended because Brazilian authorities were unable to locate him, but it was revived after Mr Santos took office in the US.
On Thursday, Mr Santos confessed to the theft in a virtual appearance before a Brazilian criminal court. He was given 30 days to pay $2,000 (£1,600) in fines and $2,800 to the shopkeeper, according to local news outlets.
In exchange, the fraud charges against Mr Santos in Brazil would be dropped.
"The case ended today," Mr Santos' lawyer, Jonymar Vasconcelos, told the Washington Post.
The congressman is still fighting 13 criminal charges in the US, including fraud, theft of public funds, money laundering and making false statements to Congress. He was indicted on Wednesday in the Eastern District Court of New York.
According to the indictment, Mr Santos is accused of using donations to his political campaign for personal expenses, including designer clothes and credit card payments.
He is also accused of receiving unemployment benefits during the Covid
-19 pandemic, even though he worked at an investment firm at the time with a reported salary of $120,000 per year.
Mr Santos is also alleged to have lied about his finances, including his income, to Congress.
"Taken together, the allegations in the indictment charge Santos with relying on repeated dishonesty and deception to ascend to the halls of Congress and enrich himself," said Breon Peace, a US Attorney for the Eastern District of New York.
If convicted on the most serious charges, Mr Santos could face up to 20 years in prison.