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High-Ranking Ukrainian Defense Officials ‘Exposed’ in $40 Million Corruption Case

12:57 GMT, 28 January 2024
© AFP 2023 / ARIS MESSINIS
Oleg Burunov
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The past few years have seen a slew of corruption scandals shatter Ukraine’s military sector, prodding President Volodymyr Zelensky to remove Defense Minister Oleksii Reznikov in September last year.
Sputnik
Ukraine’s Security Service (SBU) has searched houses and offices of Ministry of Defense (MoD) officials and managers at the Lvov Arsenal arms supplier who they claim are involved in a massive corruption scheme.

The SBU said in a statement that an investigation had “exposed” the officials and managers, who are accused of stealing almost 1.5 billion hryvnias (more than $40 million) in the purchase of nearly 100,000 mortar shells that never reached the country.

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Who is Accused?

Five individuals from the MoD and Lvov Arsenal have reportedly been served “notices of suspicion” (the first stage in Ukrainian legal proceedings), while one suspect has been detained trying to cross the country’s border, according to the SBU.
The Ukrainian Security Service stated that the “documentation of the crime” took place with the assistance of the country's current Defense Minister Rustem Umerov. According to the investigation, former and current high-ranking officials of the Ministry of Defense were also involved in the scheme.
The suspects include former and current heads of the MoD's department for military-technical policy, the Lvov Arsenal's head and commercial director, as well as a representative of a foreign company. Investigators are currently determining a preventive measure for the remaining defendants in the case who face up to 12 years in prison with confiscation of property.

How Embezzlement Took Place

A contract for the shells was clinched with Lvov Arsenal in August 2022, while payment was made in advance, with some funds transferred abroad. No arms, though, were ever provided, with some funds then moved to other foreign accounts, the statement said.

"After receiving the funds, the company’s management transferred part of the money to the balance sheet of a foreign commercial structure, which was supposed to supply the ordered ammunition to Ukraine. However, it did not send a single artillery shell, instead transferring the funds to the accounts of another affiliated structure in the Balkans.

The rest of MoD sums remained in the accounts of Lvov Arsenal in one of the Kiev banks," according to Ukrainian media.

The SBU reportedly seized the stolen funds and is now deciding on how to return them to the country.

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