The SBU exposed illegal activities of an interregional criminal group. The fraudsters embezzled state funds of the forestries. Last year, the offenders transferred over UAH 10 m (USD 357,143) to shell companies that had not provided any relevant services.

In the course of the large-scale operation, law enforcement officers conducted more than 30 searches of the offices and residences of the criminal group members in Kharkiv, Luhansk, Kyiv and Dnipropetrovsk regions. During the investigation, SBU officers found seals and incorporation documents of sham companies, financial and economic documents, electronic media, as well as other records proving the illegal activity.

Reportedly, the fraud was organized by officials of the state forestries of Kharkiv and Luhansk regions. To obtain state funds, they used prohibited financial and economic transactions with shell companies. Afterwards, they laundered money via sham businesses. In addition, the fraudsters entered false data into the Unified Register of Tax Invoices.

Law enforcement officers also documented that other state and municipal enterprises in Kharkiv region used such “conversion” network services.

The issue of serving the corrupt officials a suspicion notice of forgery of documents for state registration of a legal entity and tax evasion is being resolved.

Investigation is ongoing to identify and prosecute law enforcement officers and officials of monitoring and government agencies that were shielding the illicit business.

The operation was carried out under the supervision of Kharkiv Region Prosecutor's Office within the instructions of the state management to enhance control over the use and protection of forests, as well as combating illegal logging.