Master used cartel-linked supplier to move depositor money

EBN Comércio, Importação e Exportação Ltda. and its controlling shareholder, Julio Manfredini, have been active in public tenders to supply a wide range of products, including school uniform kits, books, Army footwear and even water cisterns for drought relief in Brazil’s semiarid Northeast, either directly or through consortia with other companies.

In at least one case, the tender stemmed from mandatory congressional caucus earmarks and included a direct request from then-Senator Roberto Rocha of Maranhão state, from the Republicans Party, that a specific price-registration record be used to purchase 500 cisterns for the state.

A report of suspected crimes sent by the Central Bank to prosecutors in November says EBN obtained a loan from Banco Master with no apparent economic justification. The company then transferred R$385 million to D Mais fund, managed by Reag.

From there, the funds were reallocated through a chain of funds in a transaction that allegedly served to divert the money to other purposes. The transaction is part of a set of operations involving 36 companies, whose names were disclosed by Valor, that allegedly led to a total diversion of R$11.5 billion from Banco Master.

Manfredini is EBN’s managing partner, according to records at the São Paulo State Board of Trade.

That company, Manfredini himself, have ties to Capricórnio S/A, which in 2021 was convicted by Brazil’s antitrust watchdog, Cade, for operating a cartel in public tenders for school uniforms and school supply kits for public school students in São Paulo, Rio de Janeiro, Santa Catarina and Goiás between 2007 and 2012.

That case also gave rise to a criminal proceeding in São Paulo over alleged violations of Brazil’s bidding law, which was dismissed in 2025 after the court found that prosecutors had failed to individualize the conduct of each defendant. There is also a civil case for administrative misconduct still pending in São Paulo.

Another proceeding, at Brazil’s Federal Court of Accounts, or TCU, involving Army procurement, shows that Capricórnio was EBN’s sole shareholder at incorporation and that EBN is its successor, keeping the same address and 70% of its workforce. Manfredini was Capricórnio’s chief executive.

According to Valor’s review, EBN took part in tenders and signed contracts with the Army between 2016 and 2024 to supply equipment such as tents, uniforms and footwear. There are no suspicions regarding those contracts, but the TCU’s technical staff did investigate flaws in oversight of footwear delivered by EBN, without imposing any sanctions.

Cistern contracts

In addition to direct tenders, EBN also joined five consortia, and some partners in those ventures are under investigation, including for alleged irregularities in the supply of textbooks in Rio de Janeiro.

EBN formed the Consortium EC, for which there are no documented suspicions of wrongdoing, alongside CSL Educacional, a company cited in the Calvário operation. One of its partners, Márcio Nogueira Vignoli, was arrested during the investigation and is awaiting trial out of custody.

One of EBN’s contracts involved the supply of cisterns in Maranhão and stands out because it originated in mandatory congressional caucus earmarks and because of the direction given to the type of bidding process that led to the R$2.4 million purchase in 2017.

Senator Rocha, then a member of the Brazilian Social Democracy Party, sent a letter to the head of Codevasf, the São Francisco Valley Development Company, stating that R$5 million in congressional earmarks had been allocated to buy cisterns and requesting that the company express interest in price-registration record No. 24/2017 from the Federal Institute of Education of Ceará, or IFCE, Maracanaú campus.

In practice, that meant the purchase, initially estimated at 2,400 cisterns but with only 500 ultimately acquired, piggybacked on a much smaller IFCE tender aimed at buying 50 storage tanks for the institute. At first glance, there is no irregularity in that mechanism, which saves procedural costs. What stands out is that the request came from a politician, rather than from Codevasf’s technical staff.

The procedure also required discussions among Codevasf technicians because it fell outside the usual standards of the Água para Todos (Water for All) program, under which the policy for distributing cisterns follows defined priorities. In the end, the cisterns were donated to nonprofit associations, such as rural unions, which then distributed the units to beneficiary families.

EBN said the loan from Banco Master was entirely lawful and was intended to provide capital for the acquisition of a large textile company. The resources were partly invested in D Mais fund, managed by Reag, then regarded as a reputable institution in the market, so the money would not sit idle.

“The negotiations did not go ahead because of unresolved differences and the complexity of the ownership structure,” the company said in a statement. EBN repaid the loan to Banco Master.

The company said Capricórnio has an independent structure from EBN and that a lawsuit was filed seeking to nullify Cade’s decision. “The criminal and misconduct cases have all, so far, been decided in Capricórnio’s favor.”

On the consortia, it said EBN conducted due diligence through compliance mechanisms. “At the time the consortium was formed, EBN had no relationship with legal entities whose executives were under investigation or facing criminal proceedings.” In the case of the cisterns, the company said the deal was approved by all oversight bodies and denied any relationship that was not in strict compliance with the rules.

Senator Roberto Rocha said joining IFCE’s price-registration record was an administrative decision to make it possible to execute the earmarks within the budget timetable, since the funds are generally released at the end of the year. He said the project followed Codevasf’s technical rules and the legal requirements for mandatory earmarks, that his office maintained institutional contact only with IFCE, and that there was no relationship with the company that won the tender.

Codevasf said it did not join a price-registration record for a tender that had already been completed, but rather one that had yet to be held, with open competition and acquisition of goods at the lowest price. “Communications between agencies to express purchase intentions are routine,” it said.

“For funding provided through a congressional earmark, identifying the beneficiaries is the responsibility of the lawmaker who submitted the earmark,” the company said in a statement. Even so, it said, parameters similar to those of the Water for All program were adopted, which helped ensure that the funds were directed to vulnerable families.

IFCE said the Maracanaú campus acted only as the manager of the price-registration record, regularly conducting the auction and managing the record. According to the institute, adhesion by other public bodies is allowed by both the tender notice and legislation, and it is up to the joining body, in this case Codevasf, to assess technical suitability, quantities and budget availability.

IFCE also said there were no spending commitments by Codevasf while the record was in effect and that the process followed normal procedures, with a favorable legal opinion.

The Army said its contracts with EBN are available on Brazil’s Transparency Portal and that, so far, no signs of irregularities or failures in oversight have been identified. It also said there are no ongoing proceedings or audits at the Federal Court of Accounts involving contracts with the company.