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01 January 2025

Fraudulent Pension Schemes Unravel Millions From Brazilian Military

Legal woes expose vulnerabilities within military pension system as investigations continue.

Fraudulent military pension practices have cost the Brazilian Armed Forces millions, highlighting significant vulnerabilities within the system. Reports indicate approximately R$ 54 million has been lost due to various cases of deception, including one particularly outrageous case where the daughter of a deceased military employee orchestrated a scheme to impersonate her mother for nearly two decades.

The fraud was uncovered when the Military Public Prosecutor's Office (MPM) discovered irregularities tied to pension payments. The situation centered on the tragic case of a widow who died without reporting her own passing. Instead of notifying the army of her mother’s death, her daughter became embroiled in deceit, presenting another elderly woman as her mother to continue collecting pension payments.

This elaborate scheme allowed the daughter to collect funds for 17 years, accumulating damages valued around R$ 230 thousand as documented by accounting experts. First convicted by the Fortaleza Auditing Court, the daughter's sentence was initially set for two years and four months on charges of fraud under Article 251 of the Military Penal Code.

After her conviction, the defense team appealed to the Superior Military Court (STM) the following year. They argued there was no intent to defraud and claimed there was no financial loss to the public administration. They contended the daughter qualified for the pension as she was unmarried and lawfully entitled to its benefits following her mother’s death.

Minister Cleonilson Nicácio Silva, the case's relator, refuted their claims citing the daughter's previous employment with the Piauí state education system, which made her pension claim invalid. "Conclui-se, pois, que a acusada induziu a administração militar em erro para a obtenção de vantagem indevida, omitindo, deliberadamente, informação sobre o falecimento da sua genitora e ex-pensionista," he confirmed, underscoring the calculated attempts to defraud military administration.

The STM upheld the original ruling, thereby reinforcing the legal consequences for fraudulent behavior and allowing the daughter to appeal her sentence from liberty with adjusted punitive measures.

Understanding the genesis of military pensions adds historical significance to the present situation. The foundation of these pensions dates back to Decree nº 695, created rapidly following Brazil's establishment as a republic on August 28, 1890. Initially dubbed as “montepio,” these pensions served as voluntary welfare for military families after losing the primary earner.

Over time, as military pensions evolved, they became subject to increasing scrutiny and legislative change with estimates pointing to alarming figures of up to R$ 54 million lost to fraudulent claims. These concerns indicate systemic issues linked to the newer generations of military personnel managing pension distribution.

Prominent military prosecutor Mário Porto explains the changes to military pension laws through various measures, such as the 2000 Provisional Measure 2.215, which altered payment structures significantly. Current laws typically restrict payable pensions to spouses and minor or disabled children, though direct payments to adult children depend on special conditions.

Porto notes, "É um benefício que a pessoa pagou para ter, mas, assim, realmente existe um peso muito grande, porque eu acredito que a base da previdência está diminuindo e o topo está se alargando. Então, há uma desproporção entre quem paga e quem recebe. Mas todo mundo pagou, todo mundo paga." This statement highlights the complexity surrounding military families' dependency on pensions, not only as income support but as potential lifelong security after the loss of the servic member.

The issue extends to the socio-economic struggles of military families, especially when relocating to remote areas, which may prevent spouses from establishing their own careers. This highlights the pressing need for reform within the military pension system to safeguard against abuse and support the intended beneficiaries effectively.

With the looming threat of more financial discrepancies and systemic weaknesses, Brazilian authorities must confront the urgent need for transparency and accountability within military administration and pension disbursement systems to prevent future losses and maintain integrity for those who have served the nation.