A 40-year-old policeman is among 17 people arrested for selling fake car insurance, a scam estimated to be worth around 4 million euros, authorities said on Friday.

Police said the scam was set up by a 42-year-old man who founded a company in Athens last October called General Commodity Trade that purported to have an agreement with a Bulgarian insurance firm. There was never such a deal and the policies sold to some 12,500 customers were worthless.

Arrests were made in Athens, Thessaloniki, Patra and Crete but another two people are still being sought.

The police officer was suspended and is to be the subject of an internal investigation.