BRB Files Civil Lawsuit Against Former Executives Over Master Bank Losses
The bank seeks damages and asset freezes following alleged illicit real estate transactions.
1Legal Action Initiated
On November 10, 2026, the Banco de Brasília (BRB) filed a civil liability lawsuit against seven former executives. The legal move targets former president Paulo Henrique Costa and six other high-ranking officials. This action follows an authorization granted by shareholders during an Extraordinary General Meeting held on August 24, 2026, regarding financial losses.
2Allegations of Misconduct
The lawsuit centers on financial operations conducted with Banco Master in 2025. Investigations by the Federal Police suggest that BRB continued purchasing credit portfolios from Master despite internal warnings regarding documentation issues, high default rates, and missing records. These transactions reportedly involved over R$ 5 billion in new acquisitions after significant problems were identified.
3Real Estate Irregularities
The bank alleges that six luxury properties in São Paulo and Brasília were used to provide undue advantages to Paulo Henrique Costa and his family members. These assets are formally registered under six different legal entities, including Allora S.A. and Lenore S.A. The properties are located in high-end developments like Heritage and Casa Lafer.
4Scope of Defendants
Beyond the former president, the lawsuit targets Dario Oswaldo Garcia Júnior, Luana de Andrade Ribeiro, Cristiane Maria Lima Bukowitz, Diogo Ilário de Araújo Oliveira, José Maria Correia Dias Junior, and Marcelo de Carvalho Talarico. Six legal entities linked to the real estate sector are also included in the civil claims for patrimonial recovery.
5Financial and Asset Measures
The BRB has assigned a value of R$ 1 million to the case for procedural purposes, noting this is not the final damage assessment. The bank has requested a preliminary injunction to freeze the assets of the former administrators and the six specific properties involved, ensuring potential future restitution for the institution's financial losses.
6Parallel Criminal Proceedings
This civil lawsuit operates independently from ongoing criminal and administrative investigations. Most of the executives named in the civil suit, excluding Talarico, have already been indicted by the Federal Police. These criminal proceedings focus on the systemic failure to heed internal alerts regarding the credit quality and operational risks of Banco Master's portfolios.
7Operational Risk Failures
Internal reports highlighted severe deficiencies in the management of credit portfolios, specifically regarding the lack of proper documentation and reconciliation failures. Despite these red flags, the bank continued to expand its exposure to Banco Master. The current litigation aims to address the accountability of those who authorized these high-risk financial decisions during 2025.
8Broader Institutional Impact
The case represents a significant effort by BRB to recover assets and establish accountability for governance failures. By pursuing both civil and criminal avenues, the bank seeks to mitigate the impact of the 2025 operations. The final determination of damages will be calculated in subsequent phases of the ongoing judicial process in Brazil.