The biggest banking fraud in brazilian history

Banco Master

#Banco Master

The Banco Master scandal reveals one of the biggest crises ever faced by the Brazilian financial system, marked by billion-dollar frauds, suspicions of money laundering, and an intense institutional clash that undermines the credibility of bodies such as the Central Bank, the Supreme Federal Court (STF), and the Federal Court of Accounts (TCU)

Everything began to take on dramatic proportions in November 2025, when the Central Bank decreed the extrajudicial liquidation of Banco Master, a medium-sized bank controlled by businessman Daniel Vorcaro.

The measure was taken after the Federal Police pointed to strong evidence of a fraudulent scheme involving the sale of false or unsecured credit portfolios, mainly in an operation with Banco de Brasília (BRB), estimated at R$ 12.2 billion.

These portfolios were used to mask the bank’s true financial situation, which paid very high interest rates on Certificates of Deposit (CDBs) to attract investors, but did not have sufficient resources to honor its commitments.

The case, which Finance Minister Fernando Haddad described as possibly the biggest banking fraud in the country’s history, led to Vorcaro’s arrest and triggered the Federal Police’s Operation Compliance Zero.

Investigations revealed a complex scheme of moving funds through investment funds, intermediary companies, and alleged embezzlement, with amounts that may exceed the initial R$ 12 billion.

The Credit Guarantee Fund (FGC) had to prepare to cover approximately R$ 41 billion for about 1.6 million affected investors-the largest bailout ever recorded in its history.

Journalist William Waack, in his analysis on the program “Análise WW,” highlighted that the episode conveys a general sense of political corruption, with a lack of shame and audacity at levels never before seen.

He pointed out that the bank survived for years thanks to the purchase of influence in key institutions of the Republic, which allowed the irregularities to continue until the scandal exploded.

Waack particularly criticized the actions of the Supreme Federal Court (STF) and the Federal Court of Accounts (TCU) in the case, questioning why these bodies were so intensely involved in the investigation and in attempting to question or review the Central Bank’s technical decision.

He believes this accelerates the loss of confidence in the institutions, creating the impression that they are being used as tools of political pressure against the monetary authority.

The Supreme Federal Court took command of the investigations under maximum secrecy, at the request of Minister Dias Toffoli, which generated criticism for the lack of transparency.

Reports also mentioned possible personal and contractual links between figures connected to the bank and ministers or family members, including contracts and meetings.

The TCU even ordered an inspection of the Central Bank to assess whether the liquidation was premature, a measure that provoked a strong reaction from the financial market in defense of the Central Bank’s independence.

Despite the tensions, there have been recent advances: the TCU and the Central Bank reached an agreement for a joint inspection, which helped to alleviate some of the conflict.

Other banks, such as BRB, ended up becoming indirectly involved.

The attempted acquisition of Master by the Brasília-based bank, valued at R$ 2 billion, was blocked by the Central Bank precisely because of suspicions surrounding the loan portfolios sold.

Large institutions such as Itaú and Bradesco are not directly at the center of the fraud, but the case exposed regulatory weaknesses that allowed Master to operate for so long offering unrealistic returns, in addition to pointing to the use of influencers to attack the Central Bank and defend the institution.

In the end, what began as a problem for a private bank turned into a crisis of confidence in Brazilian institutions.

Despite the pressure, experts consider the liquidation of Master technically irreversible, and investigations continue to try to clarify the full extent of the fraud, identify responsibilities, and recover as much as possible of the diverted resources.

The episode serves as a warning about the risks when political and financial influence are so closely linked.

Published in 01/15/2026 07h00

Portuguese version

Text adapted by AI (Grok) and translated via Google API in the English version. Images from public image libraries or credits in the caption.

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