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Serbia Arrests 17 Defense Officials For Fraud

BELGRADE (Reuters) -- Serbia's police and intelligence agencies have arrested 17 people within the Defense Ministry on suspicion of fraud, embezzlement and abuse of office.

The Defense Ministry said in a statement the group was suspected of forging documents that allowed people to use military-owned housing and to claim pensions on the basis of alleged participation in Yugoslav wars.

"Two of the suspects are colonels from Belgrade's military hospital. The ringleader was a retired army captain," a police official told Reuters on condition of anonymity.

The arrests are part of Serbia's bid to fight rampant organized crime and corruption as it attempts to build closer ties with the European Union, which it wants to ultimately join.

If convicted, the 17 could be jailed for up to 15 years.

Most of former communist Yugoslavia's military personnel have the right to live in army-owned housing throughout the country.

But the free-housing system collapsed after the outbreak of the Yugoslav wars in the 1990s, leaving many personnel of the now-defunct People's Army who fled to their native republics including Serbia, without homes.

After the ouster of former President Slobodan Milosevic in 2000, new Serbian authorities said some defense personnel should be entitled to apartments on the basis of their combat record or wounds suffered during the 1991-99 fighting.