Former Banco Master owner Daniel Vorcaro charged in fraud case
On Wednesday (Oct. 28), Brazil’s Federal Police charged former banker Daniel Vorcaro and 14 others under investigation for financial fraud at the state-owned Banco Regional de Brasília (BRB). The irregularities were brought under scrutiny during the first phase of Operation Compliance Zero.
The police report states that Vorcaro played a “personal, repeated, and directive role” in transactions involving irregular loan portfolios at Banco Master that caused losses to BRB.
“As the controlling shareholder of Banco Master, Vorcaro stood at the center of decision-making within the framework under investigation and was the primary economic beneficiary of the transactions intended to secure liquidity for the institution,” the Federal Police concluded.
He was arrested in March this year and is being held at the Papudinha prison in the Federal District.
In addition to Vorcaro, the list of those charged also includes former BRB President Paulo Henrique Costa and Augusto Lima, a former partner at Master.
All those under investigation have been charged with fraudulent management of a financial institution, criminal organization, and money laundering.
Losses
According to the federal investigators, the losses already determined amount to some BRL 2.7 billion. Part of the losses was caused by nonexistent loan portfolios held in the name of Tirreno, a shell company operated by Master, which conducted transactions with BRB.
“There are, therefore, some BRL 2.7 billion in losses that have already been formally documented and acknowledged. This is not an abstract estimate or a merely contingent risk,” the Federal Police stated.
After concluding the first phase of Operation Compliance Zero, investigators submitted the report to Brazil’s prosecutor-general and requested that the Supreme Court extend the probes for an additional 60 days.
The extension will be used to complete the pending forensic examinations and to submit a supplementary investigative report.
The Other Side
In a statement, Daniel Vorcaro’s defense team denied that BRB’s transactions with Tirreno caused any losses to the state-owned bank.
According to the lawyers, “the deal involving Tirreno’s portfolios was not finalized. The portfolios were replaced by other assets, and the exchange that took place demonstrates that the transactions between Banco Master and BRB generated positive results for Banco de Brasília. No official forensic investigation has found any loss,” the defense stated.