Iraq finds nearly $800 million fraud in funds for Islamic State victims - state media

BAGHDAD (Reuters) - Iraq's National Security Service announced it had uncovered a corruption scheme involving fraud and embezzlement of payments intended for victims of Islamic State that saw more than 1 trillion Iraqi dinars ($760 million) taken from state coffers.

Iraqi state media said a three-month investigation had led to the arrest of more than 30 suspects including senior employees at several state entities such as retirement funds and the country's Martyrs Foundation.

The alleged corruption scheme based in Anbar province saw defendants falsify pension transactions with faked identities and false credit card information and sell confidential data.

The wasted funds totalled more than 1 trillion 32 billion Iraq dinars, state media said.

Islamic State rampaged across Iraq in 2014, at one point holding nearly a third of Iraq's territory before it was beaten back and declared territorially defeated in Iraq by the end of 2017.

Prime Minister Mohammed Shia al-Sudani has said one of his priorities is fighting the rampant corruption that pervades the Iraqi state and has led to the pilfering of billions of its oil wealth over the years.

Critics say anti-corruption campaigns by Iraqi authorities are used by those in power to go after political rivals.

($1 = 1,300 Iraqi dinars)

($1 = 1,309.0000 Iraqi dinars)

(Reporting by Timour Azhari; Editing by Frances Kerry)