Ministry of Defense’s "Golden Eggs": case involving 733 million hryvnias in food procurement for AFU has been referred to court; 4.7 million euros have been seized
The NABU and the SAPO have submitted an indictment to the High Anti-Corruption Court in a case involving the embezzlement of more than 733 million hryvnias during the procurement of food supplies for the Armed Forces of Ukraine. Among the defendants are a former head of a department at the Ministry of Defense, the owner and directors of supplier companies, and an individual.
This was reported by the National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor’s Office, according to Censor.NET.
Who is involved in the "17 hryvnias per egg" case?
As previously reported, the following individuals are involved in the case:
- Former head of a department at the Ministry of Defense of Ukraine—Bohdan Khmelnytskyi;
- owner of affiliated supplier companies—Tetiana Hlyniana;
- two executives of supplier companies;
- individuals: Larysa Shvets, head of OK LEND FOOD LLC; Valerii Melesh, head of Active Company LLC; and Mykola Deshpetko, former director of Premium Company LLC.
How the food procurement scheme for the Armed Forces of Ukraine worked
According to the investigation, in 2022–2023, the Ministry of Defense procured services for organizing meals for military personnel based on a catalog of 409 food items.
Law enforcement officials allege that suppliers inflated prices for the most in-demand items and underpriced those that the military rarely ordered.
Specifically, half the total cost of the deliveries—about 1.2 billion hryvnia—was accounted for by just 40 of the 409 food items. It was precisely these items for which prices were inflated.
In contrast, 27 types of products with underpriced items totaled only 3.6 million hryvnias, accounting for 0.14% of the value of the relevant shipments.
Cherries for 8 hryvnias and strawberries for 10 hryvnias
One particular method of manipulation involved artificially lowering the prices of seasonal products.
In their catalogues, suppliers listed the following prices:
- Cherries – 8 UAH per kilogram.
- Strawberries – 10 UAH per kilogram.
- Black currants – 10 UAH per kilogram.
However, as the investigation established, military units were not permitted to order these products at all during the term of the contracts. The contracts were signed after the relevant season had already ended.
Thus, the low prices for seasonal goods created the appearance of cost-effective purchases, while essential products were supplied at inflated prices.
According to the investigation, an official from the Ministry of Defense failed to address these pricing anomalies when the contracts were signed.
As a result of this scheme, between August and December 2022, two supplier companies controlled by the same owner illegally received over 733 million hryvnias in budget funds.
Following the scandal over eggs priced at 17 hryvnias, 788 million hryvnias were saved
After the investigation began in January 2023 and media reports emerged about the purchase of eggs at 17 hryvnias per piece, the participants in the scheme—according to the NABU and the SAPO—lowered prices on the 11 most in-demand products.
As a result, law enforcement estimates that the embezzlement of an additional 788 million hryvnias from the state budget was prevented.
The investigation also established that part of the funds received was diverted to affiliated companies under the guise of dividends and repayable financial assistance.
According to investigators, the business owner may have used this money to purchase hotels in Croatia and other real estate.
Over 4.7 million euros were seized in the case
In August 2024, detectives from the Economic Security Bureau seized over 4.7 million euros in unaccounted-for cash during an investigation into tax evasion by companies supplying food products to the Ministry of Defense.
Subsequently, as part of the investigation by NABU and the SAPO, the High Anti-Corruption Court ordered the seizure of these funds.
The defendants’ actions have been charged under articles of the Criminal Code of Ukraine concerning misappropriation of property, attempted misappropriation of property, and the legalization of proceeds obtained by criminal means.
Currently, the indictment has been forwarded to the High Anti-Corruption Court for consideration on the merits. The defendants’ guilt must be determined by the court.
