Brazil’s Supreme Court in Crisis as Justice Pulled From Billion-Dollar Bank Fraud Case

Brazil’s Supreme Court removed one of its own justices from the country’s most explosive case on Thursday night — then insisted he had left voluntarily. Almost nobody in Brasília believes that version, and the institutional damage may already be irreversible.

Justice Dias Toffoli stepped down from overseeing the Banco Master investigation after a four-hour closed-door meeting of all ten justices. The trigger was a 200-page Federal Police report containing messages from Daniel Vorcaro’s phone — the detained founder of the bank — that directly mentioned Toffoli. Police also found discussions between Vorcaro and his brother-in-law Fabiano Zettel about payments to the Maridt, a company Toffoli now admits he co-owns with his brothers through a corporate structure that kept his name off public records.

A joint statement signed by all ten justices declared no grounds for formal recusal and validated every ruling Toffoli had issued since November. Sources told multiple outlets he initially refused to step aside but found himself completely isolated when every colleague disagreed. The maneuver spared the court from having to formally declare Toffoli’s bias — which would have voided months of proceedings — but did nothing to silence the growing chorus calling the arrangement a cover-up.

The question haunting the court is why Toffoli accepted the case at all. His family’s company sold resort stakes to a fund linked to Vorcaro’s circle in 2021. The day after being assigned the case, he flew by private jet to Peru alongside a lawyer defending one of the suspects. Once in charge, he ordered seized evidence locked inside the court rather than sent to investigators and hand-picked which officers could examine it — moves police called unprecedented.

Justice André Mendonça was drawn by lottery as the new lead judge. Opposition senators filed fresh impeachment motions, bringing petitions against Toffoli to at least 25. Some legislators are negotiating a political trade: removing Toffoli in exchange for filling the vacancy with former Senate President Rodrigo Pacheco.

President Lula, who appointed Toffoli in 2009 when the justice was 41 and had twice failed qualifying exams for lower judgeships, added an awkward footnote last week by calling for nominees with greater legal expertise. With 54 Senate seats up for renewal and institutional credibility in freefall, the crisis is nowhere near over.

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