By Brazil Stock Guide – Brazil’s Federal Police on Friday launched Operation Paper Boat to investigate directors of RioPrevidência, the pension fund that manages retirement and survivor benefits for more than 230,000 civil and military public servants in the state of Rio de Janeiro. The probe centers on R$970 million invested in securities issued by a private bank that was later liquidated, raising suspicions of crimes against Brazil’s National Financial System and serious governance failures.
Investigators point to nine financial transactions, carried out between November 2023 and July 2024, that channeled pension assets into financial bills (Letras Financeiras) issued by Banco Master. The instruments carried no protection from the deposit guarantee fund, which covers certain bank investments within regulatory limits. Banco Master was placed into extrajudicial liquidation in November 2025 by Brazil’s central bank, significantly amplifying the effective risk of the allocations.
Scope and scale
Federal agents executed four search-and-seizure warrants in Rio de Janeiro, authorized by the 6th Federal Criminal Court. The investigation began after a Fiscal Audit Report prepared by the Secretariat for Public and Complementary Pension Regimes at the Ministry of Social Security, the body responsible for overseeing public pension systems. The report flagged inconsistencies in the fund’s investment policy and regulatory compliance.
According to the Federal Police, the conduct under review includes fraudulent management, misappropriation of funds, misleading a public authority, and fraud against regulators or investors, as well as criminal conspiracy and passive corruption. The focus is on internal decision-making and potential individual liability related to the approval of the investments.
“The report identified exposure to risk incompatible with a pension fund’s purpose,” the Federal Police said in an official statement.
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