Russian police uncover huge fraud scheme

PanARMENIAN.Net - Russian police said Tuesday, Nov 19, they have uncovered a massive fraud scheme that stole 10.5 billion rubles ($322 million) from social payments to mothers.

Nine of the ringleaders of the alleged fraud gang were arrested in the culmination of a two-year operation involving over 800 police officers, the Interior Ministry said in a statement, according to RIA Novosti.

The social support in question was introduced in 2007 for mothers of more than one child in a bid to stimulate Russia’s low birthrate. The payments, worth over ten thousand dollars per child, can only be used for designated purposes, including real estate purchases or paying for a child’s education.

Police said the scheme used fictitious real estate deals to allow mothers from poor backgrounds, suffering from alcohol addiction or psychological problems to cash the payment, with organizers taking a commission payment of between 30 percent and 80 percent.

The alleged fraudulent service operated in dozens of regions across Russia, had corrupt links to local authorities and involved over 400 companies set up for the purpose, the police statement said.