Brazil police target Lula ally Jaques Wagner in Banco Master probe, say sources

BRASILIA, June 18 - Brazil's Federal Police served a search and seizure warrant on Senator Jaques Wagner, a close ally of President Luiz Inacio Lula da Silva and the government's leader in the Senate, as part of an investigation linked to now-defunct lender Banco Master, two sources told Reuters on Thursday.

CNN Brasil first reported the news and two people familiar with the investigation confirmed it to Reuters. Wagner's representatives did not immediately respond to a request for comment.

In a statement that did not name suspects, police said they were investigating the possible involvement of a public official in a scheme involving irregularities within the national financial system.

The warrant targeting Wagner marks an escalation of the Banco Master corruption probe into the political sphere, bringing it closer to to Lula's government as he seeks another term in Brazil's October general election.

Finance Minister Dario Durigan said in an interview on Thursday he trusts Wagner and expects him to clarify the matter with authorities.

Banco Master was liquidated by the central bank in November amid a severe liquidity crisis, and its owner Daniel Vorcaro is under arrest. REUTERS