Federal Police Report Alleges Central Bank Official Acted as ‘Informal Consultant’ to Disgraced Banker in Master Scandal

Documents from the massive financial fraud investigation known as the Master case reveal that a senior Central Bank of Brazil (BC) official acted as an “informal consultant” to the bank’s disgraced former owner, Daniel Vorcaro, directly compromising the integrity of the nation's financial regulator. The Federal Police (PF) report, released after Supreme Federal Court (STF) Justice André Mendonça lifted a confidentiality order, details how the BC official coached Vorcaro on regulatory strategies, including meetings with the former Central Bank president.

The report names Paulo Sérgio Neves de Souza, then deputy head of the Central Bank's Banking Supervision Department (Desup), and another official as having provided Vorcaro with "detailed guidance" and for having "intervened on issues of banking supervision" in favor of Banco Master. According to the PF, Souza helped Vorcaro revise official documents and advised him on strategies for meetings with the BC board and its "Presi"—an apparent reference to then-Central Bank President Roberto Campos Neto—to satisfy the regulator's demands. The disclosures show the former official's help was instrumental in clearing the bank’s major acquisitions, such as Will Financeira and Banco Voiter, despite known liquidity concerns.

The scandal centers on the collapse of Banco Master, which the Central Bank liquidated in November 2025 following the launch of Operation Compliance Zero by the Federal Police, uncovering an alleged fraud of billions of reais. The revelations now raise pointed questions about the regulatory oversight that allowed the alleged pyramid scheme to operate, given that the bank’s license was approved under the previous administration after being rejected by the one before it.

The same newly-unsealed PF report also exposed the deep political and judicial contagion of the scandal. Among the trove of documents are messages exchanged between Vorcaro and STF Justice Alexandre de Moraes, which have fueled a public rift among Supreme Court justices. Furthermore, the documents detail an investigation into Senator Flávio Bolsonaro (PL), the son of the former president and a leading political challenger, over an investment he allegedly solicited from Vorcaro to finance a film about his father.

The institutional crisis now has the full attention of the highest levels of government. STF President Edson Fachin has moved to resolve the rift and bring the matter before the court’s full plenum, while President Luiz Inácio Lula da Silva has called for the full and urgent lifting of all remaining confidentiality in the investigations, describing the matter as “the biggest financial crime in Brazil's history.” The political fallout is expected to intensify as the Federal Police investigation broadens its scope to include top figures from all three branches of government.

What it touches

The core of the Master Case has already had a direct financial impact on Brazil's financial sector. The liquidation of Banco Master and its subsidiaries is reported to have resulted in a record loss for the national Credit Guarantee Fund (FGC), requiring contributions of billions of reais from the country’s remaining banks to replenish the fund. The ongoing revelations, particularly the alleged complicity of a regulator, increase political risk for the banking and capital markets sectors as public and political pressure mounts for stricter oversight and punishment.