By Brazil Stock Guide – Brazil’s Federal Police estimate that alleged fraudulent operations linked to Banco Master may have generated as much as R$12 billion, according to testimony delivered by Director-General Andrei Rodrigues before a Senate committee.
Speaking on Tuesday (18), in remarks first reported by Agência Brasil, Rodrigues said the investigation — carried out jointly with the central bank and financial-intelligence unit Coaf — targets an alleged scheme involving fictitious credit instruments used to manipulate balance sheets. “We are conducting an important operation, together with the Central Bank and Coaf, to investigate a crime against the financial system that reaches around R$12 billion,” Rodrigues told lawmakers.
The operation, known as Compliance Zero, led to the detention of Daniel Vacaro, the owner of Banco Master, at São Paulo’s Guarulhos Airport. Executives from state-controlled Banco de Brasília (BRB) — including its president Paulo Henrique Costa and finance and controllership director Dario Oswaldo Garcia Júnior — were also targeted and subsequently removed from their positions. Rodrigues said investigators seized R$1.6 million in cash at the residence of one suspect and carried out multiple arrests.
Alleged Scheme Created Fictitious Credit and Misled Regulators
The probe began in 2024, focusing on financial institutions suspected of creating false loan portfolios and simulated receivables later sold to other banks. Investigators say that after the central bank validated the accounting entries, the institutions replaced the fraudulent credits with other assets that lacked proper technical evaluation, allowing them to conceal financial inconsistencies.
Banco Master is the main target of the investigation, opened at the request of federal prosecutors. BRB said in a statement cited by Agência Brasil that it “has always acted in accordance with compliance and transparency rules, regularly providing information to federal prosecutors and the Central Bank regarding all operations related to the negotiations for acquiring Banco Master.”
Central Bank Orders Extrajudicial Liquidation
Brazil’s central bank ordered the extrajudicial liquidation of Master Corretora de Câmbio, Títulos e Valores Imobiliários, appointing EFB Regimes Especiais de Empresas as liquidator with full administrative authority and naming economist Eduardo Felix Bianchini as technical lead.
Banco Master became known for aggressively offering returns of up to 140% of the CDI benchmark, far above the levels typically offered by comparable institutions. The firm’s operations with precatórios and failed attempts to raise funds through dollar-denominated issuances had already raised concerns about its financial condition. On Monday (17), investment group Fictor announced plans to acquire the bank, according to Agência Brasil.