Brazilian Social Security Minister Resigns Amid Pension Fraud Scandal

Brazil's Social Security Minister Carlos Lupi has resigned following a massive fraud scandal that defrauded pensioners of over $1 billion. The federal police's Operation No Discount has uncovered large-scale unauthorized deductions from pensioners, prompting multiple resignations and ongoing investigations as officials seek accountability.

Brazil's Social Security Minister, Carlos Lupi, has officially resigned just nine days after the federal police revealed a significant corruption scandal linked to unauthorized deductions from pension payments. This scheme reportedly defrauded pensioners of an astounding $1.1 billion (£829 million). Allegations indicate that the National Social Security Institute (INSS) facilitated unauthorized payments to various associations and unions, which subsequently shared these funds with corrupt government officials.

Lupi firmly denies any involvement in the wrongdoing and stated that he prompted an immediate investigation upon learning of the accusations. “I am making this decision with the certainty that my name has not been mentioned at any time in the ongoing investigations,” he expressed on social media platform X. He hopes for thorough investigations to identify and punish those who exploited their positions to the detriment of the workforce.

The police operation, dubbed "Operation No Discount" (Sem Desconto in Portuguese), has mobilized 700 federal agents, resulting in 211 search warrants across various locations in Brazil. Authorities have seized assets valued at over $177 million, including luxury vehicles such as Ferraris and Porsches, alongside significant amounts of cash.

The scheme reportedly targeted impoverished communities, registering pensioners as members of retiree associations without their knowledge, leading to unauthorized deductions from their pensions. Federal police are investigating claims that more than 6 billion reais may have been diverted between 2019 and 2024, though the exact extent of illegal activity remains to be determined.

Lupi is the second official to step down from President Luiz Inacio Lula da Silva's administration in recent weeks due to allegations of corruption, following the resignation of Communications Minister Juscelino Filho, who faced bribery charges. Notably, Lula himself previously served 1.5 years in prison for corruption, although these convictions were annulled, enabling him to reclaim his presidency.