Brazilian Supreme Court Minister Lifts Secrecy on Key Testimonies in Master Bank Fraud Case

Secrecy Lifted on Crucial Testimonies

Minister Dias Toffoli of the Supreme Federal Court (STF) in Brazil has lifted the secrecy surrounding the testimonies of key figures in the sprawling Master Bank fraud investigation. The decision, made on December 29, 2025, grants public access to the depositions of Daniel Vorcaro, the founder and former controlling shareholder of Banco Master, and Paulo Henrique Costa, the former president of BRB (Banco de Brasília). This move is expected to shed further light on the complex financial dispute that has rocked the Brazilian banking sector.

The testimonies, which were conducted before the Federal Police on December 30, 2025, are central to understanding the alleged fraud involving the acquisition of distressed assets, often referred to as non-performing loans, originating from Banco Master.

The Master Bank Fraud Investigation Unveiled

The Banco Master SA was liquidated by the Central Bank in November 2025, following a months-long investigation into alleged financial fraud and a severe liquidity crisis. Federal Police launched 'Operation Compliance Zero' in November 2025, leading to arrests and search warrants across several states. The operation aimed to dismantle a scheme involving the issuance of fake credit securities by financial institutions.

According to initial estimates by Brazil's Federal Police, the missing funds in the alleged scheme could reach R$12 billion (more than $2.2 billion), with court records referencing approximately R$16.7 billion ($3.1 billion) in transfers under scrutiny. The fraud reportedly involved the sale of 'créditos podres' (problematic loans) or 'non-existent assets' from Banco Master to BRB. The Central Bank had previously blocked BRB's proposed acquisition of Master in September 2025 due to the privately owned bank's severe liquidity crisis.

Conflicting Accounts from Key Figures

The testimonies now made public include those of Daniel Vorcaro and Paulo Henrique Costa, who were reportedly confronted during an 'acareação' (confrontation) on December 30, 2025, due to starkly contradictory accounts. Their conflicting statements primarily concern the true source of the problematic loans acquired from Banco Master starting in January 2025.

Daniel Vorcaro, who was arrested in November 2025 and later released with an ankle monitor, is accused of orchestrating the fraud. He claimed in his testimony that he was unaware that Banco Master would sell papers from the company Tirreno, expecting generic third-party papers instead. Conversely, Paulo Henrique Costa, the former BRB president, stated in his deposition that he 'did not have clarity' about the alleged fraud scheme and that the files received by BRB indicated regular transactions. He also denied Vorcaro's assertion about the nature of the papers, stating, 'I knew they were portfolios at that time, from the same originators who worked for Master.'

Broader Implications and Ongoing Investigations

The lifting of secrecy is a significant development in an investigation that has drawn considerable attention and raised questions about systemic irregularities in Brazil's banking sector. The case has also taken on political dimensions, with discussions in Congress about establishing Parliamentary Commissions of Inquiry. Furthermore, the liquidation of Will Bank, a financial institution linked to Master, was decreed on January 21, 2026, further highlighting the widespread impact of the scandal.

The public release of these testimonies is expected to provide greater transparency and aid investigators in clarifying the nature of the transactions and the degree of transparency maintained by the involved institutions. The Federal Police continue their investigations to confirm the extent of the alleged illicit activities.