Brazil’s Social Security Minister, Carlos Lupi, has resigned nine days after police unveiled a major corruption scandal which defrauded pensioners of $1.1bn (£829m).
Federal police allege that over the past decade, the National Social Security Institute (INSS) made unauthorised deductions from payments made to millions of pensioners.
The money was allegedly paid to several associations and unions, which then shared the earnings with corrupt government officials.
Lupi has always denied any wrongdoing and said he ordered an investigation as soon as he heard about the allegations.
“I am making this decision with the certainty that my name has not been mentioned at any time in the ongoing investigations,” Lupi wrote on X when announcing his resignation.
“I hope that the investigations follow their natural course, identify those responsible and punish, with rigor, those who used their positions to harm the working people,” he wrote.
Operation No Discount (Sem Desconto in Portuguese) has seen 700 federal agents issue 211 search warrants across Brazil, federal police said in a statement.
Assets worth more than $177m have been seized – including luxury cars, jewellery and more than $200,000 in cash.
The fraud allegedly involved registering pensioners as members of retirees’ associations without their consent, but as a result they had money regularly deducted from their benefits for the memberships.
Police said the scheme targeted some of the poorest areas of the country, where pensioners were unlikely to notice the fraud or complain about it.
The head of the INSS resigned last week over the allegations, and six public servants have been removed from their posts, federal police said.
Investigators are focusing on more than 6bn real they believe was diverted between 2019-2024, but how much of that money was taken illegally remains unclear.
The INSS’s director of budgets and finance, Débora Floriano, said a task force will will be set up to return the missing money, but at this stage they are still trying to determine the size of the fraud.
Carlos Lupi is the second person in President Luiz Inacio Lula da Silva’s government to lose their position due to corruption allegations in less than a month.
In early April, communications minister Juscelino Filho stepped down after he was charged with taking bribes in 2022.
Lula himself spent 1.5 years in prison in 2018-2019 for corruption, but the conviction was later thrown out, allowing him to run – and win – his third term as Brazil’s president.
