Brazil’s Federal Police have launched Operation Miragem to investigate alleged offences against the national financial system involving Digimais, a lender controlled by Bishop Edir Macedo, the agency said.

Authorities said the bank, previously under Central Bank scrutiny, is suspected of using accounting practices similar to those attributed to Banco Master, including the inflation of difficult-to-value assets to sustain deposit growth and mask potential insolvency, Valor reported.

The probe adds pressure to ongoing investigations involving other financial institutions, including Banco de Brasília (BRB).

More than 50 federal police officers executed nine search and seizure warrants issued by a São Paulo federal court. Assets totalling up to BRL670mn ($129.2mn) linked to suspects were frozen. The bank’s controlling shareholder was not targeted in the operation.

According to police, Central Bank reports indicate alleged manipulation of financial statements and regulatory records intended to conceal the institution’s true condition and meet supervisory requirements.

“Banco Digimais replicated the practice of overvaluing assets through the issuance of securities with returns disproportionate to market indicators, carrying out balance-sheet manipulations with the aim of concealing from oversight bodies the deterioration of its loan portfolio,” the Federal Police said.

Digimais said it is cooperating with authorities. The case emerges as the bank was reportedly in talks to be sold to BTG Pactual.