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300 million euros drained through a social security funds scheme

19 January 2011 / 14:01:20  GRReporter
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After revising questionable data from the data base of IKA - the largest social security fund in Greece - local authorities have found out that 300 million euros have been drained through health funds. The scheme involved 62 people from the construction business, entrepreneurs, lawyers, accountants and civil servants. The fraudulent schemes have been operating throughout the country in cities such as Thessaloniki, Kavala, Ahaia, Corfu, Piraeus, Xanthi, Preveza, Ceres and in Attica.  

The scheme has been based on the opening of phantom or real companies that have declared nonexistent workforce. The total number of nonexistent insured persons is around 50,000. Entrepreneurs have benefited from the programs for social security grants. They declared insurances of dead people and then sold them on the black market. The unusually high wage costs in the monthly reports presented as well as the social contributions were the most impressive.

The investigation lasted 12 months and 1262 electronic documents were checked. It became clear that the data do not correspond to the actual situation. Civil servants are prosecuted responsible as there is evidence that they have accepted bribes in the form of gifts or money and turned a blind eye to these actions. All the 62 persons involved will stand before the Athens court at first instance as soon as possible.

Disclosures about financial misuse angered public opinion and especially trade union forces in the country that called the law of responsibility of ministers to be applied in practice. "Millions of pensioners and insured require the most stringent penalties for all, including political leadership and managers of IKA’s funds that allowed social security funds to be looted from 2005 until now," comments the trade union of employees in the private sector regarding the findings.  

The president  of the affected social insurance fund Rovertos Spiropoulos said on the same occasion that this was the biggest blow against organized crime that have been draining money from public funds for years. He warned all those misusing public funds: "These schemes connected with violations of free drugs lists or irregularities with the social insurance contributions should understand one thing - the party is over! "Rovertos Spiropoulos vowed that this was only the beginning and the government was determined to combat illegal employment and would not allow misusing the public ownership.

And while IKA’s president threatens public ownership violators the Labour Inspectorate issued a formal notice that according to recent studies, illegal employment in Greece involves at least 25% of all workers. The data refer to the period February - December 2010 and in absolute amount this means that at least 500,000 people work without health and pension insurance and do not pay income taxes. Surprisingly, only about 27% are foreigners working in the country. The remaining 73% are Greek nationals working in the black.


Tags: Crime newsFraudsInsurance fundsGreeceIKA
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