Brazilian Social Security Fraud Ring Nets $14 Million

Brazilian authorities dismantled a criminal organization responsible for defrauding the country's social security system of at least US$14 million, the Federal Police said Tuesday.

Social Security Fraud BrazilDue to the illegal activities of this organization, the National Social Security Institute (INSS) lost more than US$14 million. (Photo: Polícia Federal, License)Operation Fictus, which mobilized more than 120 agents, executed 10 preventive arrest warrants, 27 search and seizure warrants, and one removal from office. These judicial measures were carried out in several cities of Piauí and Maranhão states, both located in northeastern Brazil.

Police say the suspects obtained social security and assistance benefits by creating phony elderly people using forged civil identification documents.

The organization also managed to reactivate benefits that had been cut off after real people had died, using false identity documents and addresses to set up bank accounts.

Authorities say the suspects tried to destroy evidence as the investigation developed.

In the city of Bacabal, Maranhão, one of the leaders of the criminal organization was arrested at the scene when he tried to withdraw benefits supposedly going to a nonexistent elderly man. These schemes netted the group more than 500 fraudulent benefits, police say. The loss inflicted by the criminal scheme on the Institute of National Social Security (INSS) is estimated at over $14 million.

The suspects may be charged with criminal organization, social security fraud, falsification of public documents, use of false documents, insertion of false data in information systems, active and passive corruption, and money laundering.

In September, a similar criminal organization was dismantled in Rio de Janeiro. It defrauded the INSS over five years of more than $3 million. The organization involved an INSS employee, a lawyer, and people pretending to be lawyers.