Social Security Minister's latest exit from major pension fraud scandal

Brazilian Social Security Minister Carlos Lupi resigned for nine days after police revealed a major corruption scandal that defrauded $1.1 billion (£829 million) of pensioners.

Federal Police claimed that over the past decade, the National Institute of Social Security (INSS) has deducted unauthorized deductions from payments paid to millions of pensioners.

The money was allegedly paid to several associations and unions, and then shared the proceeds with corrupt government officials.

Lupi has been denied any misconduct and said he ordered an investigation immediately after hearing about the allegations.

“I can be sure that my name has not been mentioned at any time in the ongoing investigation,” Lupi wrote on X when announcing his resignation.

“I hope that the investigation follows their natural process to identify those responsible and punish in a strict manner, those who use their positions to harm workers,” he wrote.

No discount on operation (Discount Federal police said in a statement that in Portugal) had seen 700 federal agents search warrants across Brazil.

More than $177 million worth of assets have been confiscated – including luxury cars, jewelry and more than $200,000 in cash.

The fraud allegedly involved registering pensioners as members of the Retirement Association, but as a result they often deduct money from benefits for membership.

Police say the plan targets some of the poorest areas of the country, where pensioners are unlikely to notice fraud or complaints.

Federal police said six civil servants have been removed from their positions last week on charges.

Investigators focus on the more than 6 billion they believe were transferred between 2019 and 2024, but how much of the money illegally taken is unclear.

Débora Floriano, director of budget and finance at INSS, said a task force would be set up to return the lost money, but at this stage they are still trying to determine the scale of the fraud.

Carlos Lupi is the second person to lose his stance on the Luiz Inacio Lula da Silva's government president because of less than a month of allegations of corruption.

In early April, Communications Minister Juscelino Filho resigned after being charged with bribery in 2022.

Lula himself was sentenced to 1.5 years in prison for corruption in 2018-2019, but was later abandoned, allowing him to run for and earn his third term as president of Brazil.