Brazil's Social Security Minister Resigns Amid Pension Fraud Scandal

The resignation of Brazil's Social Security Minister, Carlos Lupi, comes in the wake of a significant corruption scandal that has reportedly defrauded millions of pensioners. Federal police investigations reveal a scheme targeting vulnerable groups, with Lupi denying personal wrongdoing while calling for accountability.

Brazil's Social Security Minister, Carlos Lupi, has announced his resignation just nine days after federal police uncovered a significant corruption scandal that allegedly defrauded pensioners of approximately $1.1 billion (£829 million). In a statement on social media, Lupi insisted he has not been implicated in the investigation, which centers on unauthorized deductions made from payments to millions of pensioners over the last decade.

Federal police allege that these deductions were funneled to various associations and unions, with corrupt government officials benefiting from the scheme. Lupi stated, "I am making this decision with the certainty that my name has not been mentioned at any time in the ongoing investigations," as he expressed hope that the investigation would hold the guilty accountable.

The operation, dubbed "No Discount" (Sem Desconto), has mobilized around 700 federal agents who executed 211 search warrants throughout Brazil. Authorities have seized assets exceeding $177 million, including luxury vehicles and substantial amounts of cash. The fraud scheme reportedly involved registering pensioners as members of retirees' associations without their knowledge, which led to unauthorized deductions from their benefits.

The investigation is focused on over 6 billion reais believed to have been misappropriated between 2019 and 2024, although the exact amount of illegal gains remains uncertain. INSS's director of budgets and finance, Débora Floriano, mentioned the formation of a task force aimed at recovering the funds, but the extent of the fraud is still being determined.

Lupi's resignation marks the second departure from President Luiz Inacio Lula da Silva's administration due to corruption allegations within a month, following the exit of communications minister Juscelino Filho, who faced bribery charges. Lula himself has a controversial past with corruption, having been sentenced to prison in 2018-2019, a conviction that was ultimately annulled, allowing him to reclaim the presidency.