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Brazilian Police Target INSS Fraud: R$ 11.5 Million Loss, PDT Withdraws Support from Lula's Government

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Updated May 8, 2025, 06:24 PM

The Brazilian Federal Police (PF) and the Comptroller General of the Union (CGU) have launched Operation Egrégora, targeting a criminal organization that created fictitious elderly identities to defraud the National Institute of Social Security (INSS). The operation resulted in three preventive arrests and eight search warrants executed in Belo Horizonte, Contagem, and Betim, Minas Gerais. The scheme, which operated for nearly two decades, caused an estimated loss of over R$ 11.5 million to public funds, with an additional R$ 5.2 million in potential losses prevented by the operation. Ten people used 40 forged identities to illegally receive benefits. In a separate development, the INSS has been embroiled in a scandal involving unauthorized deductions from retirees' and pensioners' benefits. The fraud, which began in 2019 and escalated through 2024, involved 13 associations that illegally deducted over R$ 6 billion. The PF and CGU's Operation Sem Desconto has led to investigations against 11 of these entities, with six arrests and 211 search warrants executed across 13 states. The operation also resulted in the seizure of assets worth over R$ 1 billion. Amidst the INSS fraud revelations, the Democratic Labor Party (PDT) has withdrawn its support from President Luiz Inácio Lula da Silva's government in the Chamber of Deputies following the dismissal of Carlos Lupi from the Ministry of Social Security. The move was prompted by the appointment of Wolney Queiroz, which was not discussed with the PDT's congressional bench. Additionally, the former INSS president, Alessandro Stefanutto, was dismissed after being implicated in the scandal. The INSS, under new president Gilberto Waller, has announced that it will automatically refund the illegally deducted amounts directly into the beneficiaries' accounts. The government is considering using public funds for the refunds, with plans to recover the money from the fraudulent associations through legal action and asset seizure.

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