Imprisoned Master Bank Founder to Testify on R$12 Billion Fraud
Former Banco Master controller Daniel Vorcaro will testify on a massive public banking fraud scheme that has become a weapon in the presidential race.
The federal investigation into one of the largest financial scandals in Brazil's history is directly colliding with the final stretch of the presidential campaign. Daniel Vorcaro, the jailed former controller of the liquidated Banco Master, is scheduled to testify to the Federal Police via videoconference on Thursday, October 15, 2026. Investigators are probing a massive R$12 billion fraud scheme involving the public Banco de Brasília (BRB).
According to investigators, the scheme centered on the fraudulent acquisition of toxic credit assets, known locally as "cartas podres" or rotten credit letters, by the public financial institution. In exchange for facilitating these highly irregular transactions, the former president of the BRB, Paulo Henrique Costa, allegedly received R$150 million in kickbacks disguised as six luxury real estate properties in Brasília and São Paulo. Costa was suspended from his post last year following the initial phase of the Federal Police's Operation Compliance Zero, which targets systemic internal control failures in these financial transactions.
A Weapon in the Presidential Race
With the second round of Brazil’s presidential election just weeks away, the criminal investigation has turned into a high-stakes political battlefield between the two opposing camps. Senator Flávio Bolsonaro, who is running for the presidency, has aggressively used the scandal to target incumbent President Luiz Inácio Lula da Silva. The Bolsonaro campaign has pointed to a leaked audio recording in which Vorcaro claims to have funneled R$30 million to finance a documentary about Lula in exchange for government access. Lula's Workers' Party (PT) has vehemently denied the allegations, calling them a "farce" and pointing out that both the Federal Police and the Prosecutor-General's Office (PGR) have stated there is no evidence in Vorcaro's formal files or seized devices to back up the claim.
Meanwhile, Lula's allies have struck back by highlighting separate leaked communications from Vorcaro's seized phone. These messages reportedly show Flávio Bolsonaro directly soliciting over R$130 million from the imprisoned banker to finance a promotional film about his father, former President Jair Bolsonaro. While Flávio Bolsonaro has acknowledged the discussions, he claims he was "injusticed" and that his interactions with the financier were entirely legal, trying to frame the accusations against Lula as proof of equivalent political exposure.
What Happens Next
Vorcaro, who is currently held at the Papuda penitentiary complex in Brasília, has had his testimony delayed twice before as his defense team argued they lacked full access to the case files. Following his videoconference on October 15, federal investigators plan to schedule a formal deposition for the ousted BRB president, Paulo Henrique Costa. As the judicial proceedings advance, the Supreme Tribunal Federal (STF) is also monitoring the political fallout, with justices reviewing the integrity of the leaked recordings and their potential to illegally disrupt the democratic process.