SBU exposes embezzlement through illegal overestimation of heating costs for hospitals and schools in Luhansk region

The SBU exposed a large-scale scam on heat supply of hospitals, schools and other public institutions in Kreminsky district, Luhansk region. Allegedly, the offenders transferred more than UAH 4 m (USD 143,500) into non-observed economy.

According to the findings, a CEO of a local company organized the illegal activity. Using his contacts with former officials of the District State Administration, he provided a subsidiary company with orders for heat supply to the local public institutions.

In order to make a "profit", the offenders included eco-fuel briquettes in the standard costs. But in fact, they used common materials to heat budget institutions.

The offenders transferred the obtained "margin" into cash through affiliated companies and "conversion" centers in Kyiv.

During searches of offenders’ residences and offices, law enforcement officers found financial documents, seals of six "transit" companies, computer equipment and draft records with evidence of illegal activity, as well as almost UAH 3.5 m (USD 125,560).

The SBU initiated court seizure of confiscated funds.

The examination of discovered documents will establish local budget losses, and the issue of serving the offenders suspicion papers will be resolved.

The investigation of misappropriation is ongoing to prosecute all individuals involved in the illegal activity.

Note:

The pre-trial investigation of misuse of local funds for the repair of schools and hospitals, exposed by the SBU last November, has been completed. The offenders received eight suspicion notices, case papers are to be submitted to the court.