Instead of receiving benefits, the disabled victims instead end up owing their recruiters money, finding themselves in a situation akin to indentured servitude, Svergies Television (SVT) reports.

Using promises of living large, representatives from shady firms offering personal assistance services convince their disabled victims to move to Sweden, according to police.

“They pick up disabled people from around the world in order to get customers for their companies,” police investigator Karl-Arne Ockell told SVT.

But in order to get by while waiting for the benefits to kick in, the victims must borrow money from their recruiters, who instead keep most of the ensuing benefits for themselves.

“They borrow a lot of money, up to 200,000 to 300,000 kronor ($32,000 to $48,000), and then find themselves in a position of dependency and practically end up as serfs,” police said Ockell.

“These people are incredibly crafty; they know more about the system than I do. Many are connected to lawyers and the legislation in this area really isn’t very good, it’s full of holes,” Claes Björnerhag, chief fraud investigator with the Halland County police, told the TT news agency.

Sweden’s 1994 laws governing the support and services to be provided to disabled people (lagen om stöd och service till vissa funktionshindrade – LSS) gives disabled people the right to the assistance they need for daily living and, to the extent possible, allow them to lead lives like anyone else.

The legislation includes a law on compensation for personal assistance (LASS – Lagen om assistansersättning) which allows disabled people to receive money to cover the costs of hiring a personal assistant.

The law was first heralded as a triumph for Sweden’s disabled, but concerns about fraud soon emerged.

Despite a number of changes to the law in the intervening years, unscrupulous companies still managed to defraud the system.

After a recent slew of scandals involving personal assistant providers, the government set up an investigative commission within the health ministry to see what can be done to close the loopholes.

The commission’s suggestions are expected to be completed in February 2012.

According to Björnerhag, one of the biggest problems is that personal assistance companies aren’t required to provide Sweden’s Social Insurance Agency (Försäkringskassan), which means any remaining gains stay with the company.

“The law needs to be changed so that there’s no way to make a profit,” said Björnerhag.

Three investigations into benefits fraud schemes involving the recruitment of disabled people from abroad have led to convictions of fifteen people so far, but exactly how widespread the problem may be remains unclear.

Employees at the agency are keenly aware of the fraud related to personal assistants and the “importing” of physically disabled people to Sweden for the purpose of committing benefits fraud.

“It’s a very worrisome phenomenon which reminds one of trafficking,” the agency’s deputy director Stig Orustfjord told TT.

Last autumn the Social Insurance Agency teamed up with the police, tax authorities, financial crimes investigators and the Migration Board (Migrationsverket) in hopes of uncovering fraud by to see whether firms’ bookkeeping, work permits, and employers’ fees are accounted for and correct.

“We’re going after this industry in the same we we’ve taken on other industries where widespread fraud is suspected, like pubs and restaurants and taxi services,” said Orustfjord.

He suspects that about 10 percent of the roughly 20 billion kronor paid out in benefits is lost to fraud.

Sweden’s main association for the disabled, Handikappförbunden, also wants to see better supervision and tougher rules for personal assistant providers.

“It’s a real tragedy. Now they get permits and then they can clearly do what they want. There’s a duty to have tighter supervision and controls so that companies can’t go out and trick people,” the association’s chair, Ingrid Burman, told TT.