Here's one that might surprise some New York City voters: it turns out banks don't seem to prosper under communism. For proof look no further than Brazil where authorities moved Tuesday to shut down Banco Master SA as federal police arrested six people — including CEO Daniel Vorcaro, according to Bloomberg.

The arrests were part of a widening fraud probe. One person said Vorcaro had planned to leave the country that day.

The central bank announced it would liquidate the lender’s assets and appointed an outside administrator, adding that assets belonging to Master’s controllers and former executives were now unavailable. Police said roughly 12 billion reais were frozen and that luxury cars, art, and 1.6 million reais in cash were seized.

Bloomberg writes that the investigation, Operation Compliance Zero, began in 2024 over allegations that a financial institution issued fabricated credit instruments and sold them to another bank, later swapping them for different assets without proper evaluation. Police chief Andrei Rodrigues said: “We are conducting an important operation, in collaboration with the Central Bank and the Council for Financial Activities Control, working together to address a crime against the financial system.”

O Globo reported the receiving bank was Banco de Brasilia (BRB). BRB said its CEO Paulo Henrique Costa and its CFO were temporarily removed for 60 days but that no arrest was made, and it maintains compliance standards.

Master’s downfall followed years of rapid expansion — including an 86% average annual rise in lending, splashy Miami offices, and acquisitions — financed partly through a 4-billion-reais credit line from Brazil’s deposit-insurance fund (FGC). A December 2023 rule change undercut that support and set off investor flight.

The bank had been seeking rescue capital for months. On Monday it announced a plan to sell its commercial operations to a group led by Fictor Holding SA, but regulators would have needed to approve the deal. Master had also been trying to sell its fintech Will Bank, with talks reported between Master and Mubadala.

Regulators had already rejected a controversial merger with Banco de Brasilia, which critics likened to a government-backed bailout.

Bloomberg previously reported that officials were alarmed by links between Master’s proposed deal and firms involved in a major money-laundering probe. Asset managers Reag Investimentos SA and Trustee DTVM, which serviced Master, were under investigation in a multistate operation targeting criminal schemes tied to fuel distribution. Both firms denied wrongdoing and said they were cooperating, while Master said it was one of their many clients.