SAO PAULO (AFP) -- The Brazilian government said Wednesday it was investigating a corrupt scheme in which associations and unions allegedly stole money from retirees by skimming off part of their pensions.
The head of Brazil's National Social Security Institute, which administers pensions, was removed from his post over the scandal that comes as President Luiz Inacio Lula da Silva's administration grapples with plummeting approval ratings.
Four other INSS officials and a federal police officer were suspended, according to the office of the comptroller, responsible for combating state corruption.
Three people were arrested, it said, without giving details. Three more are the subject of arrest warrants.
The office said it had detected unauthorized deductions from pension payouts, taken by private associations and unions for services many retirees said they had never signed up for or received.
These would have included legal assistance or discounts on health plans.
The investigation is focusing on 6.3 billion reais (about $1.1 billion) deducted from the pensions between 2019 and 2024.
The amount taken illicitly, allegedly in collusion with INSS officials, has yet to be determined.
In the first quarter of 2024 alone, deductions were taken from some 5.4 million retirees, though the number of fraudulent transactions is not yet known, according to the comptroller.
Many of the pensioners interviewed by investigators said their signatures had been forged.
"The investigation concerns fraud against retirees, people who ... are naturally vulnerable and were easy victims of these criminals," Justice Minister Ricardo Lewandowski told reporters in Sao Paulo.
On Wednesday, police carried out more than 200 raids in various states and seized assets worth about $175 million dollars.
Authorities are investigating crimes including corruption, document forgery, organized crime, and money laundering.
This is the second corruption scandal to rock the Lula government in weeks.
Earlier this month, Communications Minister Juscelino Filho resigned after being accused of taking bribes when he was a congressman in 2022, before the start of Lula's current term. He denies the charges.
The Lula administration has also come under fire for granting asylum -- for humanitarian reasons, it said -- to former Peruvian first lady Nadine Heredia, sentenced to 15 years in prison last week in her country for money laundering.
Corruption is a sensitive issue for the Brazilian government, with Lula himself having served 1.5 years in prison starting in April 2018 for allegedly taking bribes.
His conviction was later annulled on the grounds that the judge in the tial had been biased.
The annulment allowed Lula to seek, and win, a third presidential term in 2022, but the stain of corruption turned him into a pariah for many in a deeply divided country.
koreadherald@heradcorp.com
