About 80 million rubles ($2.7 million) of money that private lotteries in Russia were obliged by law to spend on the funding of arthouse movies were misused, the Audit Chamber said on Wednesday.
Private lotteries in Russia have to hand over a cut of their earnings to “socially important” events and projects, including a state-owned fund supporting arthouse movies.
The fund received 131 million rubles from lotteries in 2009-2012 but 61 percent of the sum never reached filmmakers, instead it was siphoned back to lottery companies, the financial watchdog said on its website.
The fund is headed by Elmurod Rasulmukhammedov, who is also the founder and co-owner of the Russkoe Loto, a major player on the Russian lottery market.
At least some of the deals that allowed the money to return to lottery companies appeared to be fraudulent and some hinted at tax evasion, the Audit Chamber said.
The watchdog stopped short of speaking of outright embezzlement but said it reported the misuse of funds to the government, including the Interior Ministry.
Rasulmukhammedov said that the money was not lost but spent on developing state-of-the-art ticket tracking software for cinemas, which are often accused by filmmakers and distributors of concealing their profits. He said the missing money was given out as loans to software developers, which are expected to be paid back “shortly.”