Billions frozen in crackdown on Brazil’s biggest bank fraud case
Operation Compliance Zero, led by Brazil’s Federal Police, marks its six-month anniversary this Monday (Apr. 18). The six phases carried out up to May 14 have brought to light what may be the largest case of fraud against the country’s national financial system ever recorded, potentially causing losses of tens of billions of dollars.
The crackdown also revealed the intricate web of relationships that investigators’ main target, Banco Master owner Daniel Vorcaro, established with politicians, criminals, and high-ranking public officials. The list includes Central Bank directors and agents of the Federal Police itself.
Investigations into the scheme believed to have been led by Vorcaro kicked off in early 2024 at the request of federal prosecutors.
Since then, the evidence gathered has prompted the Supreme Court to issue 21 temporary or preventive detention orders, including for the banker himself.
A total of 116 warrants were also issued for the freezing and seizure of assets valued at approximately BRL 27.71 billion. The orders were executed in seven Brazilian states.
Phase one
In the first phase of Operation Compliance Zero, on November 18, 2025, Daniel Vorcaro, 42, was one of seven people arrested. Evidence pointing to the “creation of credit portfolios without financial backing” had been under investigation for nearly a year. The federal agents concluded that these securities had been sold to another bank, Banco de Brasília (BRB) – the Federal District’s state-owned bank – and that after an inspection by the Central Bank, they were replaced by other assets without proper technical evaluation.
Six others were arrested – including the former CEO and partner at Banco Master, Augusto Ferreira Lima. At the time, a federal court in Brasília also ordered the removal from office of the then-president of BRB, Paulo Henrique Costa, and the then-chief financial officer of the same bank, Dario Oswaldo Garcia.
The first phase of the crackdown was launched one day after Fictor Holding Financeira unveiled its plan to buy Banco Master in partnership with investors from the United Arab Emirates.
Seven months earlier, BRB’s board had attempted to acquire Master for approximately BRL 2 billion, but the Central Bank blocked the deal in early September, two months before the Federal Police and the judiciary exposed what financial market analysts had been discussing for some time – Master’s lack of capital reserves.
Amid these revelations, the Central Bank initiated the extrajudicial liquidation (the permanent shutdown of an insolvent or non-compliant company or body) of financial institutions within the Master conglomerate – such as Master de Investimento, Letsbank, Master Corretora de Câmbio, Will Financeira, and Banco Pleno. The Central Bank also froze the assets of the group’s controlling shareholders and former executives and placed Master Múltiplo S/A under a special temporary administration regime.
To date, the Credit Guarantee Fund (FGC) has spent approximately BRL 49.5 billion to reimburse customers of the Master Group, Will Bank, and Banco Pleno. Funded by mandatory contributions from member institutions, FGC aims to protect the financial system, prevent crises, and safeguard customers by guaranteeing payment of up to BRL 250 thousand per individual or corporate taxpayer number in the event of an intervention or liquidation by the Central Bank.
Phase two
On January 14, as part of the second phase of the crackdown, the Supreme Court issued 42 search and seizure warrants. Authorities were also seeking evidence of money laundering.
With authorization from Justice Dias Toffoli, more than BRL 5.7 billion belonging to those under investigation was frozen. Fabiano Zettel – pastor of the Lagoinha evangelical church in Belo Horizonte and Vorcaro’s brother-in-law – was detained while attempting to board a flight to the United Arab Emirates but was subsequently released.
Phase three
Released following a ruling by a federal court ten days after his arrest during the first phase, Vorcaro was once again arrested on March 4, during the third phase. The Federal Police found messages on his seized cell phone in which he discussed with others the possibility of staging a fake attack against journalist Lauro Jardim of the newspaper O Globo, as well as other violent actions against former employees.
According to the agents, the owner of Master ran a private militia to intimidate and coerce his enemies. “The Posse,” as Vorcaro referred to the group, was led by Luiz Phillipi Machado de Moraes Mourão, known as Sicário.
Arrested in Belo Horizonte, Mourão was taken to the Federal Police headquarters. Hours later, he was found unconscious in the cell where he had been left alone. The Federal Police state he attempted suicide and, although he was found alive and received first aid on the spot before being rushed to a hospital, he did not survive and died.
In addition to the arrests of Vorcaro and Mourão, two other preventive arrest warrants were executed, targeting the banker’s brother-in-law, Zettel, and retired police officer Marilson Silva; 15 search-and-seizure warrants were issued; and BRL 22 billion in assets and bank accounts belonging to those under investigation were seized and frozen.
The Supreme Court also ordered the Central Bank to suspend the former head of the Banking Supervision Department of the Inspection Directorate, Belline Santana, and the former deputy head of the same department, Paulo Sérgio Neves de Sousa. According to the Central Bank, the two are suspected of acting illegally in favor of Banco Master’s interests.
Phase four
The fourth phase of the operation took place on April 16, primarily to further the investigations into corruption involving public officials. With authorization from the Supreme Court, federal agents placed former BRB President Paulo Henrique Costa and Vorcaro’s lawyer Daniel Monteiro under preventive detention. Seven search-and-seizure warrants were also executed.
According to the investigations, Costa allegedly agreed with banker Daniel Vorcaro to receive BRL 146.5 million in bribes. The funds were to be transferred through real estate transactions. The Federal Police claim to have evidence that at least BRL 74 million was paid, which Costa denies.
Phase five
On May 7, the fifth phase of Operation Compliance Zero targeted Senator Ciro Nogueira, Daniel Vorcaro’s cousin Felipe Cançado Vorcaro, and others under investigation in the Federal District, Minas Gerais, Piauí, and São Paulo states. In total, ten search-and-seizure warrants and one temporary arrest order were executed.
Senator Ciro Nogueira, former minister under ex-President Bolsonaro, was the target of search-and-seizure warrants, suspected of acting politically on behalf of Daniel Vorcaro’s interests. In exchange, the Federal Police said, the senator received BRL 300 thousand to BRL 500 thousand per month, in addition to other benefits, such as coverage of international travel, lodging, and restaurant expenses.
In August 2024, Nogueira introduced an addendum to a constitutional amendment bill on the autonomy of the Central Bank. The text, which became known as the Master Amendment, advocates increasing the ordinary guarantee of the Credit Guarantee Fund from the current BRL 250 thousand to BRL 1 million – which, according to experts, would jeopardize the fund’s sustainability. According to the Federal Police, the amendment was drafted by advisors to Banco Master and handed over to Nogueira so that he could present it to the National Congress as his own work.
His cousin Felipe Cançado was one of the targets of the operation’s second phase in January, but he escaped in a golf cart shortly before federal police arrived at the house where he was staying in Trancoso, Bahia. In the fifth phase, he was temporarily detained on suspicion of being one of the financial operators of the scheme set up by Nogueira.
In total, Supreme Court Justice André Mendonça issued ten search-and-seizure warrants. He also ordered the freezing of assets, rights, and funds belonging to those under investigation, totaling BRL 18.85 million. He further ordered that Senator Ciro Nogueira’s brother, businessman Raimundo Neto e Silva Nogueira Lima – one of the targets of this phase – be required to wear an electronic ankle tag, surrender his passport to the Federal Police, and refrain from leaving Teresina (the city where he lives and the capital of the state of Piauí), as well as from contacting other individuals under investigation or witnesses.
Phase six
Six preventive arrest warrants and 17 search-and-seizure warrants were executed on May 14, during the sixth phase of the operation. A seventh arrest warrant was executed two days later, leading to the apprehension of Victor Lima Sedlmaier, who was captured in Dubai, United Arab Emirates, in a joint operation by the Federal Police, Interpol, and local police.
Among the other targets was businessman Henrique Vorcaro, father of Daniel Vorcaro. According to the Federal Police, Henrique was involved in managing “the Posse,” the group uncovered in the third phase and identified as the banker’s personal militia.
Federal police officer Anderson da Silva Lima was also arrested, suspected of passing on confidential information about ongoing police probes to Daniel Vorcaro. In addition, Justice André Mendonça ordered the transfer of retired federal police officer Marilson Roseno da Silva, who had been in custody since the third phase, to a federal prison – an order carried out last Friday (Apr. 15).
Dark Horse
Last week, news reports by The Intercept Brasil revealed recordings in which Senator and presidential hopeful Flávio Bolsonaro asks banker Daniel Vorcaro for money. In the voice notes, the senator justifies the request as funding for a biopic about his father, onetime President Jair Bolsonaro.
The senator himself admitted the authenticity of the audio recordings and the content of the leaked conversation, but denied having committed any wrongdoing, assuring that all the money provided by Vorcaro was used to fund the production of the film Dark Horse.
Also according to The Intercept Brasil, the banker agreed to allocate BRL 134 million to the production, of which at least BRL 61 million was actually released. This prompted several lawmakers to call for an investigation into the source and use of the funds.
On Sunday (17), former Federal Representative Eduardo Bolsonaro, Flávio’s brother, who lives in the US, said the budget for the film about his father “is not expensive by Hollywood standards,” since it is directed by US Director Cyrus Nowrasteh and features several foreign actors in the cast, including Jim Caviezel, who plays the former president.
