Sources say that the Brazilian police have issued warrants to businessmen involved in an investigation into Banco Master.

Two sources familiar with this matter said that the Brazilian federal police issued search and seizure warrants on Wednesday against businessmen Nelson Tanure and Daniel Vorcaro as part of a probe into an alleged fraud at Banco Master.

The raids were part of the second stage of an operation that began in November and led to Vorcaro's detention on the day Banco Master was liquidated by the Brazilian central banks.

Vorcaro was released later, but had an ankle monitor to wear.

In a statement released on Wednesday, Vorcaro’s lawyers stated that they were aware of these warrants. The businessman is cooperating fully with the authorities and ready to clarify "the facts" and bring the investigation to a quick conclusion.

Tanure, a distressed company investor and a major shareholder of the power?firm Light & oil company Prio, did not respond immediately to requests for comments.

SECOND PHASE POLICE PROBE OF SUSPECTED CRIME

In a press release, the federal police stated that the second phase of this operation investigated suspected crimes, including fraud management of financial institutions, market manipulation and money laundering.

Images released by police show that authorities executed 42 'warrants' authorized by the Supreme Court, and confiscated cash, watches and cars, as well as documents, a firearm and documents.

The police are also trying to freeze assets worth more than 5.7 Billion Reis ($1.1 Billion).

GOVERNMENT SUGGESTS A LARGE-SCALE BANKING FABRICATION

The operation comes one day after Finance minister Fernando Haddad warned that the case could be "the largest bank fraud in the history of the country."

Although?Banco Master only accounts for less that 1% of the total banking assets in Brazil, its collapse is a major concern

Drawn into scrutiny

FGC, the private guarantee fund of the country, is heavily reliant on high-yielding debt.

Investors await potential FGC payouts of up to $7.64 billion.

(source: Reuters)