INSS Fraud Investigation Stalled by Political Obstacles, Experts Say
A multi-state investigation into a massive fraud scheme targeting Brazil’s National Institute of Social Security (INSS) is facing significant delays, with experts citing a lack of political will as a key impediment despite the complexity of the case. The operation, dubbed “Operation Without Discounts,” has already resulted in search and seizure warrants served in 13 states and the Federal District, uncovering a scheme that has defrauded retirees and pensioners of an estimated R$6.3 billion between 2019 and 2024.
The investigation centers on improper discounts levied on the benefits of INSS recipients by associations and unions, often through unauthorized memberships. While authorities have made initial progress – including the removal of several key officials – the pace of accountability remains slow, raising concerns about a potential cover-up.
“The identification of the criminal group is difficult due to the need to break bank and tax secrecy, which requires judicial authorizations and takes time,” explained a criminalist consulted by R7. Further complicating matters, evidence suggests that legal entities are being used as fronts, with representatives often acting as “straw men” for the true masterminds behind the scheme. This obfuscation creates challenges for prosecution and raises questions about jurisdictional authority, particularly as the investigation potentially implicates individuals with political influence.
The scale of the fraud is substantial. According to investigators, 11 associative entities are implicated in the scheme. The dismissal of INSS President Alessandro Stefanutto and the removal of three agency servers – Giovani Batista Fassarella Spiecker, Vanderlei Barbosa dos Santos, and Jucimar Fonseca da Silva – underscore the depth of the problem. Additionally, the Attorney General with the INSS, Virgílio Oliveira Filho, and an unnamed Federal Police agent were also removed from their positions. Authorities are also investigating businessman Antonio Carlos Antunes, known as the “Bald of the INSS,” who is believed to have acted as a financial intermediary for the fraudulent entities.
However, legal experts warn that proving the absence of consent from victims is a significant hurdle, as the fraudulent discounts are often concealed behind generic authorizations, frequently signed unknowingly. “This type of fraud takes advantage of the complexity of the payroll system and requires a much greater probative effort,” noted lawyer Lisiane Ribeiro.
Ribeiro further emphasized the critical need for “political will, institutional courage, and procedural agility” to move the investigation forward. She expressed concern that the lack of formal indictments to date could indicate a deliberate attempt to shield those with privileged legal standing. “We have robust operations, such as financial movements that are incompatible, contracts with facade entities, political connections, but without direct accountability to agents who allowed, intermediated or benefited from it within the public machine,” she stated. “Without naming and indicating these links, we just continue to fight symptoms.”
Despite the challenges, Ribeiro remains optimistic that an outcome is inevitable. The president of ABRADEB (Brazilian Association for the Defense of Customers and Consumers of Financial and Banking Operations), Raimundo Nonato, echoed this sentiment, urging investigators to proceed cautiously to avoid procedural missteps that could jeopardize future prosecutions.
A Mixed Parliamentary Commission of Inquiry (CPMI) was requested in May to further investigate the illegal discounts, with Senate President David Alcolumbre reading the request in June. The composition of the commission is currently being finalized, with Senator Omar Aziz expected to chair the board and a representative from the House of Representatives serving as rapporteur. However, recent legal challenges facing former President Jair Bolsonaro have temporarily shifted the opposition’s priorities.
Meanwhile, efforts are underway to reimburse affected retirees and pensioners. As of Monday, July 21, 2025, approximately 839,000 individuals had joined the reimbursement agreement, representing 40.4% of the 2.05 million eligible beneficiaries. Payments, with IPCA correction, are being deposited directly into beneficiaries’ accounts, and the deadline for enrollment remains open through the My INSS application or in person at post office agencies.
