Federal Police Probe Reveals Billions in Fraudulent Credit Purchases by BRB

The Brazilian Federal Police have concluded that the Banco de Brasília (BRB) transferred approximately R$ 17 billion to Banco Master for the purchase of credit portfolios, with R$ 12.2 billion of those assets identified as fake. According to the investigation, the fraud involved fake Bank Credit Notes (CCBs) from non-existent payroll loans generated by Tirreno, a shell company controlled by Cartos. The Federal Police report states that former BRB president Paulo Henrique Costa intentionally sought to save Banco Master by ignoring legal warnings and bypassing standard technical analyses to accelerate payments. In some instances, BRB executives allegedly expanded delinquency limits from 4 percent to 5 percent to facilitate the acquisition of problematic assets.

Paulo Henrique Costa, who has been in preventive detention since April, is accused of receiving R$ 146 million in luxury real estate from Master banker Daniel Vorcaro. Following a court order to block his assets, bank reports revealed that most of Costa's accounts were empty or in debt, including a debit balance at Itaú and a R$ 799,435.79 debt owed to BRB for loans taken between 2021 and 2024. During a search of his high end apartment in Brasília, police seized more than 20 firearms, including 16 pistols and five rifles.

BRB has issued a statement claiming the institution was a victim of criminal acts. The bank noted that it has since completely renewed its executive board and hired an independent forensic audit to investigate the operations. While center leaning coverage focuses on the technical details of the financial fraud and the internal failures of the bank's leadership, center left leaning coverage emphasizes the personal legal troubles of the former president and the current administration's efforts to distance the institution from its former executives.