Brazilian Social Security President Fired Amid Billion-Dollar Fraud Investigation
The president of Brazil’s National Social Security Institute (INSS), Alessandro Stefanutto, was dismissed Wednesday following a massive fraud investigation that uncovered an estimated $1.2 billion scheme targeting pension recipients.
Federal Police Uncover Widespread Pension Fraud
A joint operation by Brazil’s Federal Police and the Office of the Comptroller General (CGU) revealed a sophisticated scheme where association and union entities established Technical Cooperation Agreements with the INSS, enabling unauthorized monthly membership fees to be deducted directly from retirees’ benefits without their knowledge or consent.
According to investigators, the scheme operated between 2019 and 2024, with authorities identifying 21 organizations that conducted unauthorized deductions from social security payments. The estimated damages total 6.3 billion reais (approximately $1.2 billion).
“The investigation has uncovered evidence of forged signatures, including those of beneficiaries with incapacitating illnesses, illiterate indigenous people, and even individuals residing abroad,” said a Federal Police spokesperson.
Large-Scale Operation Across 14 States
The operation involved approximately 700 federal police officers and 80 CGU officials who executed:
- 211 search and seizure warrants
- Asset seizure orders exceeding 1 billion reais ($190 million)
- Six temporary arrest warrants
The police action spanned the Federal District and 14 Brazilian states. During the searches, officers seized luxury vehicles, cash, jewelry, and artwork. Three suspects were arrested, while three others remain at large.
Presidential Intervention
President Luiz Inácio Lula da Silva directly ordered Stefanutto’s dismissal after he was initially suspended from his position by judicial order. Before the formal termination was executed, Stefanutto attempted to submit a resignation letter, but the government proceeded with his dismissal.
The official termination was signed by Miriam Belchior, Executive Secretary of the Civil House, and published in the Federal Official Gazette on Wednesday.
Carlos Lupi, Minister of Social Security, acknowledged his responsibility for appointing Stefanutto, stating: “I want to punish exemplarily any citizen who has committed errors, misdeeds, or crimes.”
This marks the second INSS president to be removed during Lula’s current administration. The previous president, Glauco Wamburg, was dismissed in 2023 over alleged misuse of government-funded travel expenses.
Legal Consequences
The suspects could face charges including active and passive corruption, violation of functional secrecy, document forgery, criminal organization, and money laundering.
The Brazilian government has not yet announced who will replace Stefanutto at the helm of the INSS, which manages social security benefits for millions of Brazilians.
The case highlights ongoing challenges with corruption in Brazil’s public institutions and the vulnerability of the country’s retiree and pension systems to exploitation.