Serbia's police and intelligence agencies arrested 17 people within the defence ministry on Tuesday on suspicion of fraud, embezzlement and abuse of office.
The defence 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 ring leader 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 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 defence personnel should be entitled to apartments on the basis of their combat record or wounds suffered during the 1991-1999 fighting.
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