INSS fraud: one year later, investigation turns into a political crisis and remains without outcome

One year after the launch of Operação Sem Desconto, the scheme of illegal discounts on INSS benefits was consolidated as the biggest recent Social Security fraud, with effects that go beyond compensation to policyholders and reach the political and institutional field.

More than R$3 billion has already been returned to retirees and pensioners, while investigations are ongoing at the Federal Supreme Court (STF).

The case, revealed on April 23 last year by the Federal Police (PF) and the Comptroller General of the Union (CGU), provoked immediate changes in the Social Security command.

The first phase of the operation led to the departure of then minister Carlos Lupi and the removal of INSS leadership, including president Alessandro Stefanutto and attorney general Virgílio Ribeiro de Oliveira Filho. In total, 211 search and seizure warrants were executed, six temporary arrests and freezing of assets worth more than R$1 billion.

How the scheme worked

Investigations conducted by the Federal Police indicate that the embezzlements occurred between 2019 and 2024 and could reach R$6.3 billion. The model consisted of the improper inclusion of retirees in associations, with monthly charges applied directly to benefits.

In practice, policyholders were treated as members without having authorized membership. The entities involved claimed to offer services such as legal advice and commercial benefits, but, according to the Comptroller General of the Union (CGU), they did not have the structure to fulfill these promises.

The fraud came to light on April 23 last year, after the first phase of Operation Without Discount. From then on, contracts were suspended and legal measures began to affect suspicious associations.

Institutional crisis

The progress of the investigations took the issue to Congress, which installed a Joint Parliamentary Commission of Inquiry (CPMI) in August. The collegiate functioned for around four months, but ended without approval of a final report, following political disputes and disagreements over accountability.

The opinion presented called for the indictment of more than 200 people, including businessman Fábio Luís Lula da Silva, known as Lulinha, but there was no consensus among parliamentarians.

During the CPMI’s operation, the focus of discussions shifted to the electoral clash. Opposition parliamentarians sought to associate the scandal with the current government, while government supporters highlighted that the scheme had started in 2019. The lack of a practical conclusion reinforced the assessment that Congress was unable to advance political accountability for the case.

The political impact also directly affected the Lula government. Even with previous origins, the revelation and expansion of fraud occurred during the current term. In response, Planalto promoted changes in the management of the INSS and the Ministry of Social Security. Wolney Queiroz took over the portfolio, and the command of the institute underwent new changes until the most recent appointment of Ana Cristina Viana Silveira.

Investigations at the STF

The investigation also faced internal disputes in the Judiciary. In June, the case was taken to the STF and was initially reported by Minister Dias Toffoli, following a request from a delegate.

The Attorney General’s Office (PGR) contested the distribution, and the then President of the Court, Luís Roberto Barroso, ordered a new draw. The process ended up in the hands of Minister André Mendonça.

The change delayed the pace of investigations, as there was a risk of invalidating evidence. With the rapporteur’s definition, the case moved forward again. The former president of the INSS was arrested, and names linked to the scheme began to gain visibility, such as the lobbyist Antônio Carlos Camilo Antunes, known as “Careca do INSS”.

Measures such as breaches of confidentiality were also authorized, although, in Lulinha’s case, there is so far no concrete evidence of a crime.

The most recent phase took place in March this year, with Operation Indébito, which included deputy Gorete Pereira (MDB-CE) among the targets. She denies wrongdoing. The progress of investigations now depends, in part, on negotiations of plea bargains.

Government response

At an institutional level, the government adopted measures to contain the problem and prevent new cases. Associative discounts were suspended and, later, prohibited by law approved by Congress. The model was precisely the mechanism used to carry out undue charges.

In addition, the Union opened extraordinary credit worth R$3.3 billion to guarantee the return of the amounts. According to the INSS, around 4.4 million policyholders have already received more than R$3 billion. To access compensation, some of the beneficiaries signed an agreement that requires them to waive legal actions against the government. The deadline for joining remains open until June 20th.

Notifications and deadline to contest

In May 2025, around 9.5 million beneficiaries were informed by the INSS about the existence of associative discounts on their payments. The statement opened the possibility of contesting and requesting a refund.

The deadline for responding was extended twice, each time for periods of 90 days, and remains open until June 20th. The insured can indicate whether they authorized the discount, whether they wish to contest it or request a refund of the amounts.

Return responsibility

In response to the case, the government sanctioned, in January, a law that prohibits discounts made by associations directly in social security benefits. The measure seeks to eliminate the mechanism that allowed the scheme to operate.

The text approved by Congress also provided for an active search by the INSS to locate injured beneficiaries, but this section was vetoed. According to the government, the proposal assigned responsibilities to the autarchy that could generate “legal and operational risks, in addition to extraordinary costs, without presenting the appropriate estimate of budgetary and financial impact”.

Under current legislation, the return of amounts becomes the obligation of the authority responsible for the discount. Once the irregularity has been identified, compensation must be made in full within 30 days after notification or administrative decision.

The volume of resources already returned indicates progress in repair, but the number of beneficiaries still inactive keeps a relevant part of the problem open.