Embezzlement of tank armour funds by executives uncovered at defence plant – Ukraine's Security Service

The Security Service of Ukraine (SSU) and the National Anti-Corruption Bureau (NABU) have dismantled a large-scale scheme operating in two regions of the country. The perpetrators have embezzled UAH 102 million (about US$2.4 million) of state funds allocated for the production of reactive armour for Ukrainian Armed Forces tanks.

Source: Security Service of Ukraine website

Details: The SSU reported that law enforcement identified the organisers of the scheme after a series of coordinated operations in Zaporizhzhia and Dnipropetrovsk oblasts: the commercial director of a state-owned company, its former head and the owner of a contracting firm.

The investigation has found that in April 2022, the state plant signed a contract with Ukraine's Ministry of Defence for the urgent procurement of reactive armour kits for Ukrainian tanks. The armoured vehicles were meant to be rapidly equipped and dispatched straight from the factory to the front lines.

However, instead of promptly fulfilling the defence order, the main suspect, then head of the manufacturing company, orchestrated the embezzlement of the budget funds.

To carry out the scheme, he involved the plant's commercial director and the founder of the contractor company, with whom he had signed a contract to procure armour components at prices three times higher than the market rate.

The group siphoned off the difference via a web of linked companies and split it among the conspirators.

Specialised expert examinations confirmed that the actions resulted in particularly large-scale losses to the state budget.

The three organisers of the crime have been notified of suspicion on charges of misappropriation of property through abuse of office, laundering assets obtained by criminal means and forgery in office.

The former head of the defence plant, who is among the suspects, is already in custody as part of an earlier investigation into the production of defective mortar rounds. SSU investigators detained him at the end of April this year.

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