Vorcaro is our Ponzi scheme.

The pyramid scheme built by Daniel Vorcaro through Master Bank was dismantled by the liquidation ordered by the Central Bank. Those involved must be punished according to the law. The fact that judicial authorities appear to want to reverse it, especially Minister Dias Toffoli of the Supreme Federal Court, is shocking not only because of the billions of reais involved in the uncovered fraud – 12 billion reais – but also because of the risk of enshrining the Judiciary's complicity with financial criminals who are close to the government.

Vorcaro's crime is the well-known – and at a certain point trivialized – financial pyramid scheme. It falls under Law 1.521/1951, Article 2, item IX:

"To obtain or attempt to obtain illicit gains to the detriment of the people or an indeterminate number of people through speculation or fraudulent processes ('pyramid schemes', 'chain letters', 'Ponzi schemes' and any other equivalents)."

Although outdated, the law has motivated legislative proposals that seek to toughen the punishment – ​​initially from six months to two years of imprisonment and a fine – and bring this type of crime into more modern codes, such as the Law on Crimes against the Financial System (7.492/1986), whose penalties vary according to the type of crime, with imprisonment that can reach 12 years and a fine, depending on the severity of the conduct, and the Penal Code.

With rare and inconspicuous exceptions, the press did not link the topic to the figure of Charles Ponzi, who in the 1920s drove thousands of investors in the United States from ecstasy to despair thanks to his pyramid schemes.

Ponzi was an Italian immigrant who promised high returns based on a supposed arbitrage of international postal reply coupons. In practice, there was no viable economic activity. The returns paid to the first investors came from the money of later investors. After the collapse of the scheme and Ponzi's conviction for postal fraud, his name came to designate this specific type of financial fraud – the "Ponzi scheme". Throughout the 20th century, the term became established in the international legal, economic, and regulatory vocabulary.

In essence, Ponzi schemes and pyramid schemes produce the same result and share the same fraudulent core. The difference is primarily structural. In a Ponzi scheme, the fraud is centralized; the investor does not need to recruit other people, as the operator controls the flows and creates the appearance of a reliable investment. In a pyramid scheme, there is a hierarchical structure and dependence on the continuous recruitment of new participants.

The practice attributed to Master, according to public information and ongoing investigations, can be analyzed as a structural fraud that presents similarities to Ponzi schemes, in both the economic and analytical sense of the term. Vorcaro issued and traded assets or credit portfolios without real collateral, had apparent solvency, but depended on new operations to sustain previous commitments.

Since the term "Ponzi scheme" is not used in Brazil, Vorcaro's charges will likely fall under crimes against the financial system, fraudulent management, fraud, document forgery, criminal organization, and money laundering, in addition to administrative sanctions from the Central Bank. This is contingent on Toffoli allowing it.