Brazil Police Indict Master Bank Founder and BRB Ex-President Over Credit Portfolio Fraud

Brazil's Federal Police indicted 15 people on Wednesday over suspected financial crimes tied to the attempted sale of Banco Master to Banco de Brasília (BRB). The partial criminal investigation report was prepared under Inquiry 5.026, which is proceeding before the Supreme Federal Court.

Police allege a scheme involving credit portfolios of questionable origin, the later production of documents, and the alleged concealment of ownership and movement of resources. Executives from the financial, legal, and operational structures of both banks and related companies are said to have participated.

“The indictment does not represent a criminal conviction by itself.”

Daniel Vorcaro, former controlling shareholder of Banco Master, faces five charges: fraudulent management of a financial institution, inducing an investor to error in a financial operation, fraud against tax inspection, criminal organization, and money laundering. Combined sentences for these crimes range from 12 to 41 years in prison.

Paulo Henrique Costa, former president of BRB, was indicted for fraudulent management and participation in a criminal organization. Police say Vorcaro personally participated in preparing credit portfolios, obtaining resources from BRB, and drafting documents used to justify the operations.

The investigation identified irregularities in the assets commercialized by Master, including databases and documents whose authenticity is questioned. Some operations allegedly involved fabricated payroll-deducted credit portfolios.

The report will be submitted to Prosecutor General Paulo Gonet, who will decide whether sufficient elements exist to file a criminal complaint. Police indictment does not equal a conviction and does not automatically turn the investigated individuals into defendants.