The Security Service of Ukraine and the NABU have dismantled a large-scale scheme for embezzling defence funds, which operated in two regions of Ukraine. The perpetrators embezzled UAH 102 million (USD 2.4 mln) from the budget for production of reactive armour for Ukrainian Armed Forces tanks.

The organisers of the scheme have been exposed in Zaporizhzhia and Dnipropetrovsk regions: they are a commercial director of a state-owned enterprise, its former head, and an owner of a contractor company.

The investigation established that in April 2022, the state plant signed a contract with the Ministry of Defence of Ukraine for an urgent purchase of reactive armour systems for tanks.

The vehicles equipped with this protection were to be put into immediate service and sent directly from the factory workshops to several sectors of the front.

However, instead of immediately fulfilling the defence order, the main organiser, the head of the manufacturing enterprise at the time, organised the embezzlement of the funds.

To operate the scheme, he involved the plant’s commercial director and the founder of the contracting company, with which he signed a contract to purchase armour components at prices three times higher than market prices.

The fraudsters then funnelled the resulting ‘difference’ through a network of affiliated companies for further division between the participants of the illicit scheme.

Expert examinations initiated by the Security Service and NABU confirmed that their actions caused particularly large losses to the state budget.

During the searches of the suspects’ homes and offices, documentation and computer equipment used in the crime were found.

Based on the evidence, the three organisers have been notified of suspicion under the Articles of the CCU:

• 27.3, 191.5 (appropriation, embezzlement, or acquisition of property through abuse of official position, committed upon prior conspiracy, by a group);
• 209.3 (laundering of property obtained by criminal means);
• 366.1 (official forgery).

One of the suspects, the former head of the defence plant, is already in custody as part of a previously initiated investigation into the production of defective mortar shells. SSU investigators apprehended him at the end of April this year.

The decisions on measures of restraint against other suspects are pending.

The operational and investigative actions were carried out by the SSU Office in Dnipropetrovsk region under the procedural supervision of the Specialised Anti-Corruption Prosecutor’s Office.