R$ 17 billion. That is the value of the fraud Brazil's Federal Police says it found in dealings between Banco Master and BRB, the state-owned bank of the Federal District. Spread across the country's roughly 203 million people, it would come to almost R$ 85 each.
Behind the hole sit public money and the savings of thousands of retail investors. According to G1, Master raised billions by selling CDBs, a popular type of fixed-income investment in Brazil, at rates far above what big banks paid. Clients were also drawn in by protection from the FGC, Brazil's deposit guarantee fund, within its coverage limits.
Rates too high to be true
To pull in cash fast, Master offered CDBs paying between 130% and 180% of the CDI, the benchmark rate for fixed income in Brazil, according to financial planner Jeff Patzlaff, interviewed by G1. For comparison, banks considered healthy raised funds paying between 100% and 105% of the CDI. CNN Brasil reported rates of up to 140% of the CDI.
"When you saw Banco Master offering 130%, 150% or even 180% of the CDI, that was not generosity, it was a cry for help," Patzlaff told G1.
Understand: a CDB (Certificado de Depósito Bancário) is a loan the client makes to a bank in exchange for interest. The FGC is a fund maintained by the banks themselves that repays up to R$ 250,000 per person, per institution, if a bank fails. That guarantee is what gave small savers the confidence to invest with Master despite the outlandish rates.
Credit portfolios that did not exist
According to the Federal Police, BRB paid about R$ 17 billion to Master for credit portfolios. Of that total, R$ 12.2 billion is under investigation because the credits did not exist, G1 reports. A police report published by InfoMoney, citing the newspaper O Estado de S. Paulo, describes the "massive production of fake documents" and the use of a shell company, Tirreno, to make the deals look backed by real assets.
Investigators say Master's technology team used computer scripts to mass-produce credit notes with taxpayer IDs pulled from old databases. Police also found 2,700 automatically generated powers of attorney simulating that clients had authorized loans in their names, even though they had never signed anything.
In exchange, Master owner Daniel Vorcaro allegedly paid R$ 146.5 million in bribes to BRB's then president, Paulo Henrique Costa, through the purchase of at least six luxury properties in São Paulo and Brasília, according to the Federal Police. Both are in jail as part of Operation Compliance Zero, the task force investigating the scheme.
Retirees' money caught in the middle
Pension funds for state and municipal civil servants had about R$ 1.8 billion invested in the bank, according to G1. CNN Brasil found that Rio de Janeiro invested almost R$ 1 billion in Master financial notes, the state of Amapá put in R$ 400 million, and four cities in São Paulo state also had money with the bank.
In November 2025, the Central Bank ordered Master's liquidation, citing a severe liquidity crisis, a compromised financial position and violations of financial system rules. Will Bank and Banco Pleno, from the same group, were also liquidated. Vorcaro was arrested again in March of this year, in the operation's third phase, and the case may still see new developments in court.