Nearly UAH 3bn in losses: large-scale defense procurement scheme uncovered, Prosecutor General’s Office says
The Prosecutor General’s Office, together with the SBI, has uncovered a large-scale corruption scheme in defense procurement involving the supply of unfit mortar rounds and the misappropriation of budget funds.
As Censor.NET reported, this was announced on the Telegram channel of the Prosecutor General’s Office of Ukraine.
The total damage to the state, according to preliminary estimates, amounts to UAH 2.994 billion.
Defense Ministry contracts and unfit ammunition
According to the investigation, a private company signed five state contracts with the Defense Ministry’s Department of Military-Technical Policy, the Defense Procurement Agency, and the Logistics Forces Command of the Armed Forces of Ukraine to supply mines of various types.
Some of the ammunition was actually delivered, but forensic examinations found that the mines were unfit for use and dangerous. Under other contracts, no deliveries took place at all, despite the receipt of large advance payments.
The investigation found that:
- UAH 571.3 million constitutes losses from the supply of unfit mines;
- UAH 2.423 billion constitutes losses from the possible misappropriation of advance payments.
The state customers have already filed lawsuits seeking recovery of funds, fines and penalties.
Subcontractor and fictitious work
The scheme also involves a subcontractor company that was supposed to load the ammunition with explosive material. More than UAH 120 million in advances was transferred to its accounts, but the work, according to investigators, was not carried out, and no effective claims work was pursued by the main supplier.
The unfitness of the ammunition is confirmed by:
- physicochemical studies of the explosive substance;
- inspection and testing materials;
- a comprehensive forensic examination report.
In particular, non-compliance with technical specifications was found, along with failures to initiate detonation and an insufficient amount of explosive substance in the mine bodies.
Separately, investigators are examining possible misuse of advance funds, their diversion to purchase equipment unrelated to the defense contracts, and the subsequent transfer of this property to another commercial entity.
Suspicions and preventive measures
In the case, 10 people have been notified of suspicion, including:
- representatives and management of the supplier company;
- accounting staff;
- the head of the subcontractor company;
- officials of military representative offices.
Four suspects have been detained. Motions have been prepared to seek pre-trial detention with bail ranging from UAH 100 million to UAH 500 million.
Law enforcement continues to identify the full circle of those involved, is checking the role of officials in quality control and acceptance of the products, and is taking steps to recover the damage caused to the state.
