Valor obtained the list of companies—mostly small firms—from a report submitted by the Central Bank to the Public Prosecutor’s Office on November 17, one day before Banco Master was placed into liquidation.

Many of the companies are in the construction sector, recently established and lightly capitalized, some with equity of less than R$1,000. Others operate in industries such as food, hospitality, and import/export. Some share common owners.

The Central Bank found the transactions suspicious for two main reasons. First, some companies appear to be shell entities without real operations. Normally, banks follow a rigorous lending process, including client visits, risk analysis, and credit checks.

Second, the bank traced how depositor funds—mostly held in fixed-income instruments called CDBs (Bank Deposit Certificates) and backed by Brazil’s Credit Guarantee Fund (FGC)—were allegedly funneled through a complex system of loans and fund investments, ultimately returning to Banco Master as deposits via sham investment vehicles.

Among the firms on the list is Brain Realty Consultoria e Participações, which reportedly took a loan of R$449.36 million. After receiving the funds, Brain and most other companies invested in Reag-managed funds D Mais and Bravo.

On average, each company involved allegedly funneled R$288 million through the scheme, with the smallest amount reaching R$57 million. Brain had the largest individual loan. The communication to prosecutors also cites individual persons, but their names were not included in the list obtained by Valor.

The D Mais and Bravo funds, in turn, invested in other Reag funds where the actual diversions occurred. One of the most heavily used vehicles was the FIDC High Tower.

That fund bought so-called cártulas—instruments representing shares of the defunct Banco do Estado de Santa Catarina (Besc), which was absorbed by Banco do Brasil in 2008. High Tower reportedly acquired these instruments at low prices, then marked them up substantially in its books. One batch was purchased for R$850 million and later revalued to R$10.8 billion, the Central Bank reported.

Fake loans

The scheme allegedly worked as follows: fake loans were issued to 36 companies, the funds were invested in overvalued Besc cártulas via Reag funds, and the profits from the inflated valuations were captured by those behind the scheme. High Tower sold the overpriced assets it had previously bought cheaply, despite their lack of liquidity.

As a result of these transactions, the High Tower fund reported a staggering annual return of 10,502,205.65% in 2024, equivalent to a profit of R$10.5 billion in a single year, even after redeeming R$6 billion in fund units.

Most of that profit came at the expense of the 36 companies, which allegedly took out fake loans from Banco Master. At the very start of the scheme were the deposits entrusted by Master’s clients, backed by the FGC.

After the funds were allegedly siphoned off, a laundering process began to conceal the beneficiaries. The money was invested and reinvested in exclusive funds, almost all linked to Reag. Ultimately, the money ended up in the hands of frontmen.

In its report to prosecutors, the Central Bank detailed every transfer, highlighting matching amounts, dates, and times. In the case of Brain Realty, the funds reportedly returned to Banco Master as a CDB investment.

PCC scheme

The regulator flagged six Reag-linked funds with heavy involvement in these transactions: Astralo 95, Reag Growth 95, Hans 95, Maia 95, and Anna. Reag is already a key focus of Operation Carbono Oculto (Hidden Carbon), launched in August 2025 to investigate the use of investment funds to launder money for criminal group PCC.

This alleged scheme is one of two frauds reported by the Central Bank. In July 2025, it had already sent prosecutors another report outlining alleged irregularities in the sale of R$12.2 billion in credit portfolios from Banco Master to Banco de Brasília (BRB).

In those transactions, Master sold nonexistent credit operations to BRB. Master claimed it had purchased the portfolios from a third-party company called Tirreno and was unaware of missing documentation or financial activity that should have backed them. But the Central Bank found that Tirreno’s owner was a former Master employee.

As reported by Valor last week, the Central Bank has since uncovered links between the two fraud schemes. Executives from Banco Master and BRB submitted capital increase proposals that involved funds from front companies tied to the fabricated loans routed through Reag.

In its report to prosecutors, the Central Bank requested the freezing of R$11.5 billion in assets held in the names of frontmen to recover misappropriated funds. These resources are needed to compensate creditors of Banco Master’s liquidation estate, including the FGC and public-sector pension funds.

Reag said in a statement that it is not a target of Operation Compliance Zero. “The mentioned funds are regulated, audited, and supervised by the CVM [Securities and Exchange Commission of Brazil] and the Central Bank. All contributions are subject to approval by the Central Bank, which verifies both the origin of funds and the financial capacity of contributors,” the company said.

Attorneys for Daniel Vorcaro, Banco Master’s owner, told Valor that they had not requested that any of the three operations mentioned—Carbono Oculto, Quasar, or Tank—be reviewed by Brazil’s Supreme Court.

“The only request submitted to the courts aimed to clarify reports that improperly linked Daniel Vorcaro and Banco Master to these operations,” the defense team said.