Huge Brazil police raid targets $2.5-bn pension fraud

Brasília (AFP) - Brazilian police staged a massive raid Monday to crack down on what they described as rampant fraud in the pension system, one of the world's most generous -- and most over-stretched.

In the latest graft sting for corruption-weary Brazil, more than 500 officers across eight states seized 90 buildings, impounded more than 100 cars and froze a total of eight billion reals ($2.5 billion) in assets allegedly linked to fraudulent schemes at the country's largest public pension funds.

"The operation was based on 10 cases that we uncovered in examining the reason for the pension funds' multi-million-real deficits. Of the 10 cases, eight are linked to reckless or fraudulent investments," police said in a statement.

A court in Brasilia ordered seven people be temporarily detained and 34 others taken in for questioning. It issued more than 100 search and seizure orders for documents related to the case.

The Securities and Exchange Commission of Brazil said the assets of 103 individuals and companies had been frozen.

The raid targets fraud at the funds that manage pension contributions for employees at large state companies such as oil giant Petrobras, Banco do Brasil and the postal service.

Brazil's pension system is known for generous benefits and the lack of a minimum retirement age -- causing it to operate at huge losses, feeding a deficit that currently stands at more than 10 percent of GDP.

President Michel Temer, who was sworn in last week after predecessor Dilma Rousseff was impeached, has vowed to make pension reform a top priority.

But he faces resistance in Congress and corruption headaches of his own.

Brazilian politics has been rocked in recent months by a massive kickbacks scandal at Petrobras, which contributed to Rousseff's downfall.

The scandal has already claimed three of Temer's ministers, and allies fear more names could emerge.