Brazil’s police targets a close ally of President Lula in sprawling fraud probe

RIO DE JANEIRO (AP) — Brazil’s federal police executed search and seizure warrants targeting a high-ranking senator and friend of President Luiz Inácio Lula da Silva on Thursday as part of a fraud and graft probe that has ensnared several politicians ahead of October’s general election.

Police are looking into suspicious payments to Sen. Jaques Wagner, the leader of Lula’s Workers’ Party in the Senate, as part of investigations into the shut down Banco Master and its disgraced former CEO, Daniel Vorcaro.

Wagner is the first major Lula ally to be hit by the sprawling scandal that has already engulfed presidential hopeful Sen. Flávio Bolsonaro, among others. The scandal is expected to loom large in the upcoming elections.

In a statement that did not name suspects, police said they were executing 18 search and seizure warrants in the states of Bahia and Sao Paulo and the Federal District for facts that may constitute the crimes of passive corruption, active corruption and money laundering.

Court documents signed by Supreme Court Justice André Mendonça on Wednesday and obtained by The Associated Press on Thursday – which cited the suspects – authorized the search.

Investigators found indications that the senator may have received undue economic benefits, including the purchase of a luxury apartment in Salvador, valued at around 2.45 million reais (approximately $470,000), the court documents said.

Investigators are also examining whether Wagner used his position in Congress to advance issues of interest to Banco Master, including payroll loans and deposit insurance rules, according to the court documents.

Police seized approximately $50,000 in Brasilia as part of Thursday’s operation. Local media reported that those funds were found at an address or addresses linked to Wagner.

Questioned on the funds in an interview with Brazil’s major broadcaster Band on Thursday, Wagner said he had nothing to hide and had never received money from anyone with ties to Banco Master.

Wagner also denied any significant dealings with Vorcaro, the former head of Banco Master who is currently in jail. “My relationship with Daniel Vorcaro is practically nonexistent… I met Daniel only twice,” he said.

In a statement late Thursday, Wagner’s press team denied having acted on behalf of Banco Master, said the cash seized was legally obtained, and that the apartment never formed part of the senator’s assets.

Brazil’s Central Bank shut down Banco Master, whose assets topped $16 billion, in November.

Vorcaro, who is at the center of the investigations, was arrested in March and has since tried to strike a plea bargain deal with authorities.

Brazil’s federal police estimates the bank’s total fraud at approximately 12 billion reais ($2.3 billion). The case remains under investigation by the country’s federal police and Supreme Court.

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