Brazil’s Biggest Banking Fraud Scheme Explained

Almost a year after an investigation into Brazil’s biggest-ever banking fraud scandal, authorities are only now beginning to understand the full extent of the money laundering, political corruption, and gang ties behind the alleged operation at Bank Master.

The case first broke in November 2025, when the Central Bank of Brazil (Banco Central do Brasil – BCB) liquidated Bank Master, citing evidence of serious financial regulatory violations. The BCB bypassed the traditional judicial process and immediately initiated an extrajudicial liquidation to repay creditors and prevent a bank run.

Days later, authorities arrested Bank Master’s owner, Daniel Vorcaro, in São Paulo’s Guarulhos Airport. The police believe he was trying to flee the country.

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The investigation continues today, and on June 26, the BCB dismantled Sefer Investments, a financial institution accused of obscuring the funds diverted by Bank Master. Sefer Investments is now the third company liquidated as part of the scandal, aside from Bank Master itself.

How Did the Fraud Work?

Vorcaro presented himself as an ordinary, successful Brazilian entrepreneur, but authorities say that beneath that façade lurked a sophisticated criminal operator.

At the heart of Vorcaro’s alleged operation was a Ponzi-like scheme. Bank Master raised money by selling Bank Certificates of Deposit (Certificados de Depósitos Bancários – CDBs), or bank-issued fixed-income products. In simpler terms, investors lend money to a bank in exchange for an agreed interest rate. Bank Master promised a higher return than its competitors could afford to attract investors. The problem, according to authorities, was that Bank Master could not afford it either. 

After Bank Master was paid for the fraudulent CDBs, it invested the money in a credit fund where it was the only investor. Vorcaro allegedly diverted this money to companies linked to his family and partners. Part of the resources were also sent to shell companies and funds controlled by front men, according to investigators. This made it so Bank Master needed new investors to pay off the original investors, and then newer ones, and so on. It was unsustainable, and Bank Master did not have the liquid assets to pay back the loans. 

Bank Master also allegedly sold fake or low-quality portfolios of payroll-backed loans—a type of credit that is paid back automatically from people’s salaries or pensions—promising other institutions a return they would not get. The bank offered loan portfolios to institutional investors, pension funds, retirement funds, and other banks. This was supposed to generate profit for the buyers, as they acquired the portfolios for a fixed price and would receive the equivalent value plus interest. However, the portfolios were fake or worth less than promised, and buyers never got the expected returns.

Investigators believe Vorcaro laundered the money from these scams through Bank Master by moving funds between accounts to hide their true origin and overvaluing assets to attract investors.

A Portrait of Brazil’s Corruption Machinery

Investigators believe Voraco was able to operate with impunity for years thanks to deeply entrenched corruption inside Brazil’s financial sector and government.

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According to Bruna Perez, an anti-money laundering consultant, Bank Master stands out from other financial scandals because the bank’s owner was using his own institution to launder money.

“If the bank is required by the regulator to have an anti-money laundering department to prevent money laundering, but the bank itself is laundering funds within its own system, how are you supposed to catch it?,” she told InSight Crime. “They were using the prevention apparatus to launder money.” 

And while banks are expected to fight fraud internally, it is the government that sets and enforces the rules. So Vorcaro cozied up with top lawmakers and established links with politicians from left- and right-wing parties. Several senators have been investigated for taking bribes to pass legislation favorable to Bank Master, among them former President Jair Bolsonaro’s chief of staff, Ciro Nogueira, and Jaques Wagner, the former government leader in the Senate. 

Vorcaro is also accused of recruiting officials from financial institutions and security forces. In March 2026, he was charged with corrupting civil servants at the Central Bank, while several current and former police officers were also arrested for allegedly using confidential information to tip Vorcaro off about investigations and intimidating people that could expose his operations.

Vorcaro’s Criminal Iceberg

The complex web of actors and institutions involved in the Bank Master case also includes private militias and criminal organizations.

In addition to the financial crimes that led to his arrest, Vorcaro was charged with coordinating an armed enforcement wing dubbed “the Crew” (A Turma) to protect his criminal scheme.

In practice, the Federal Police (Polícia Federal – PF) described the Crew as a paramilitary structure led by Vorcaro that involved active and retired police officers, members of Rio de Janeiro’s militias, and operators involved in the illegal lottery known as Jogo do Bicho, or the “Animal Game.” One of Rio’s oldest criminal economies, Jogo do Bicho has grown incredibly popular, and today the criminal groups running these games are close with gangs, militias, and politicians.

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Armed with high-powered weapons and armored cars, the Crew allegedly threatened people who could disrupt Vorcaro’s businesses, surveilled targets, and illegally collected private information to threaten the lives and families of potential whistleblowers.

Vorcaro paid the gang at least R$ 400,000 (around $78,000) a month, according to the police. Investigators allege that a former car thief named Luiz Phillipi Machado de Moraes Mourão, alias “Sicário,” led the group, while a retired police officer named Marilson Roseno da Silva used his experience and contacts to surveil targets and collect sensitive information from police investigations and court proceedings.

The police investigation also uncovered links between the Crew and Brazil’s largest gang, the First Capital Command (Primeiro Comando da Capital – PCC). Reag Investments, one of the companies liquidated by the Central Bank for its alleged involvment in the fraudulent schemes, managed a fund suspected of receiving money from a fintech company operating for the PCC. Another company suspected of being run by a PCC member was hired to carry out a São Paulo city government project by the producer of former President Bolsonaro’s biographical movie, “Dark Horse,” which was partially funded by Vorcaro. The producer is under investigation for diverting funds from the project to the movie.

Voraco’s surveillance and intimidation operations also extended into the digital sphere. After Bank Master’s liquidation, Vorcaro signed contracts of up to R$2 million (around $390,000) with digital influencers to attack the Central Bank and promote Bank Master on social media, according to the Federal Police. The propaganda operation, called Project DV—Daniel Vorcaro’s initials—was also allegedly in charge of monitoring journalists and entrepreneurs seen as posing a threat to Vorcaro’s businesses.

*This is the first of a three-part series detailing the massive Bank Master fraud case in Brazil. The second and third parts will be published in the coming weeks.