Emerging
Published Jun 18, 2026Updated Jun 19 Major2
81%
Brazil Police Target Lula Ally in Sprawling Banco Master Fraud Probe
Brazil's federal police have targeted Sen. Jaques Wagner, a close ally of President Lula, in a major fraud investigation linked to the collapsed Banco Master. The probe involves allegations of corruption, suspicious payments, and undue economic benefits, with investigators examining whether Wagner used his congressional position to benefit the bank.
Quick Facts
- Federal police executed search and seizure warrants
- Investigation into fraud and corruption at Banco Master
- Examination of suspicious payments to Wagner
- Inquiry into whether Wagner used congressional position to benefit the bank
- Seizure of approximately $50,000 in cash
Brazil's federal police executed search and seizure warrants on Thursday targeting Sen. Jaques Wagner, a high-ranking ally and close friend of President Luiz Inácio Lula da Silva, as part of a widening fraud and corruption investigation. Wagner, who leads Lula's Workers' Party in the Senate, is under scrutiny for suspicious payments allegedly linked to the collapse of Banco Master and its former CEO Daniel Vorcaro. The operation deployed 18 search and seizure warrants across Bahia, São Paulo, and the Federal District, authorized by Supreme Court Justice André Mendonça, investigating potential crimes of passive corruption, active corruption, and money laundering.
Investigators have identified indications that Wagner may have received undue economic benefits, including the purchase of a luxury apartment in Salvador valued at approximately 2.45 million reais (around $470,000). Court documents also suggest investigators are examining whether Wagner leveraged his congressional position to advance Banco Master's interests, particularly regarding payroll loan policies and deposit insurance rules. Police seized approximately $50,000 in cash in Brasília during the operation, reportedly found at addresses linked to Wagner.
Wagner has denied all allegations through media interviews and his press office. He stated he has nothing to hide and never received money from anyone connected to Banco Master, claiming his relationship with Vorcaro was "practically nonexistent" despite meeting him twice. His team asserted that the seized cash was legally obtained and that the luxury apartment never formed part of his personal assets. The investigation centers on Banco Master, which the Brazil Central Bank shut down in November after the institution's assets exceeded $16 billion.
Daniel Vorcaro, the disgraced former CEO at the center of the investigation, was arrested in March and is currently incarcerated while attempting to negotiate a plea bargain with authorities. Brazil's federal police estimate the bank's total fraud at approximately 12 billion reais ($2.3 billion). This case represents a significant development as Wagner becomes the first major Lula ally ensnared by the scandal, which has already affected other political figures including presidential hopeful Sen. Flávio Bolsonaro, with the investigation expected to significantly influence October's general election.
Why This Matters
This investigation represents a watershed moment in Brazilian politics, directly implicating a senior Lula ally in a $2.3 billion fraud scandal. The case threatens to destabilize the Workers' Party at a critical juncture ahead of the October general election, potentially eroding confidence in Lula's administration and its oversight mechanisms. For readers following Brazilian governance and corruption trends, this signals that no political figure—regardless of proximity to the presidency—is immune from accountability, while also raising questions about systemic institutional safeguards against financial crimes.
Timeline & Sources
Jun 17, 2026
WireSupreme Court Justice André Mendonça signed court documents authorizing search warrants
Jun 18, 2026
WireFederal police executed 18 search and seizure warrants targeting Sen. Jaques Wagner