Greek welfare fraudsters exposed

Greek welfare fraudsters exposed
by Costas Papachlimintzos
22 March 2012


People registered as blind had a driving licence and used their car regularly. Ordinary farmers in rural areas received state subsidies that raked in annual earnings higher than those of top bankers. Employees in the Social Security Foundation (IKA) drove expensive cars and lived in luxurious villas.

The past few weeks have exposed, almost on a daily basis, the magnitude of welfare fraud in Greece. Facing nearly empty state coffers and mounting pressure from the EU and the IMF to cut spending and balance its budget, the government has started running long-overdue reviews of beneficiaries of state aid. According to findings, millions of euros have been paid to deceased pensioners, parents who didn’t have children and blindness claimants with perfect eyesight.

The government has announced that it will reclaim the money unjustifiably paid and move ahead with a second round of reviews in order to discover more fraudsters. Moreover, under the new bailout deal, the government has committed to undertake a thorough review of social spending programmes in order to identify cost savings equal to 1.5 percent of GDP, with measures to be introduced over 2013-14.

The review, which is expected to be completed by the end of June, will identify “programmes to be discontinued and opportunities to rationalise and strengthen core social programmes to better support individuals in need, while reducing transfers to others”.

Fake: 1 in 6 disability claims

A total of 36,294 out of the estimated 244,887 recipients of welfare benefits has failed to register at Citizen Service Centres (KEP). According to officials from the health ministry, a high percentage of the no-shows did not register because they lacked the necessary supporting documentation. As Andreas Loverdos, the health minister, said in a radio interview, people from local doctors to members of local government were involved in the network that issued false certificates.

Health ministry officials said that nearly one in six disability allowances will be cancelled at the end of March after the discovery that thousands of payments were based on false claims - including drivers registered as being legally blind and bogus cases of leprosy.

Deputy Health Minister Markos Bolaris said on March 20 that the government will be saving around 110 million euros per year by putting an end to those allowances. He also claimed that the government expects to save a further 120 million euros in annual payments after the second, more detailed review is completed.

A 6m euro family affair

A scam carried out by staff at the Kallithea branch of IKA, Greece’s largest social insurance fund, paid out benefits to recipients who were not entitled to them and who split the proceeds with others over a period of nine years. According to an investigation completed by the financial police, the scam is believed to have cost IKA more than six million euros.

The investigation, done in cooperation with the IKA inspection services, lasted two months and culminated in the arrest of six people. Police also confiscated the sum of 966,900 euros and three luxury cars. Those arrested included four women employed at the Kallithea branch and two of their husbands, while the money, in notes of 500, 200, 100 and 50 euros, was found concealed in a packet of disposable nappies in a storeroom owned by one of the suspects.

Taking advantage of their positions in different departments of the same branch, the six are accused of illegally approving payment of benefits to a number of individuals, including themselves, relatives and friends, some of whom were not even insured with IKA. The money was illegally paid out, then split between the beneficiaries and the employees who approved it. The payouts, which began in 2003, mainly consisted of maternity and childbirth benefits, healthcare costs, hospital and spa treatment fees, as well as cost of personal nursing services.

The island’s blind taxi driver

The most amazing findings of the official survey on state allowances come from the island of Zakynthos. Out of the 700 people drawing a disability benefit for blindness on the Ionian island, only 100 had appeared before health inspection committees, and of these 60 were discovered not to be blind. One of the recipients of state benefits for being blind was a taxi driver.

Although reports on false claims for blindness had been circulating on Zakynthos since 2003, no official investigation had been conducted and no measures had been taken against this scam. The island’s mayor, Stelios Bozikis, said in a television interview that the doctor who issued the false documents has not been placed on leave yet and claimed that the illegal claims were established by the former governor of the prefecture to win election votes.

Striking it rich in farming

Tens of millions of euros have reportedly been given away to farmers in the form of state subsidies, despite their not being entitled to them.

Yiannis Drivelegas, deputy minister for rural development and food, told parliament on March 14 assessments made by the Greek Agricultural Insurance Organisation (ELGA) suggested that payouts to farmers were drafted in politicians’ offices. He added that an administrative inquiry on this issue has begun, while an attorney is also looking into the case.
Speaking the day after on state television, Drivelegas said that there was an “orgy of waste and of serving special interests” in ELGA from 2007 to 2009. During this period, the minister claimed, the insurance fund’s deficit skyrocketed to 4 billion euros, from 800 million. He cited an example of a family whose members received a total of 750,000 euros during this three-year period.

In a separate development, the European Commission demanded early in January the return of what it terms were illegal state subsidies worth 435 million euros (including interest) paid out to Greek farmers in 2008 and 2009. The commission’s decision includes payments worth 424.8m euros made by the state to Greek farmers in early 2009, which it says was in breach of EU law on state subsidies.

Source: Athens News.