Brazil’s Central Bank Liquidates Banco Master as Police Arrest Owner in R$12 Billion Fraud Probe

Overview

• Operation Compliance Zero detained founder Daniel Vorcaro and other executives after a federal judge cited robust evidence of an organized scheme and estimated public losses exceeding R$10 billion.
• Investigators say Banco de Brasília transferred R$16.7 billion to Master since 2024, including R$12.2 billion for allegedly fictitious credit portfolios described as a bid to sidestep Central Bank scrutiny.
• The BRB’s president was removed from duty for 60 days, while the bank says it found documentation divergences in Master deals, notified regulators, and largely replaced the questioned portfolios.
• With liquidation, accounts are frozen, a court‑appointed liquidator takes over, and the FGC typically begins reimbursements in about 30 days; the action also covers Letsbank and Master’s currency brokerage, while another Master entity was put under temporary administration.
• Federal police will also probe Master’s sales of uncovered letras financeiras to state and municipal pension funds, totaling roughly R$1.867 billion, as experts expect tougher risk rules but no systemic threat to the banking sector.