Ukraine uncovers $40 million defence embezzlement scheme

Through a fictitious armaments procurement plan, Ukrainian defence officials and business executives attempted to embezzle almost $40 million, the nation’s principal intelligence and security agency said on Saturday.

The Ukrainian Ministry of Defence verified the accusations of corruption and issued notifications of suspicion to the officials involved.

They occur at a time when Republicans in the US oppose US President Joe Biden’s attempts to provide Ukraine with further help, and when former US President Donald Trump—who has publicly opposed US military assistance for Kyiv—seems to be heading straight for the Republican candidature.

Ukraine’s SBU security service said that current and former senior officials of the defence ministry and heads of affiliated companies “attempted to steal almost UAH 1.5 billion ($40 million) from the budget by purchasing 100,000 mortar rounds for the Armed Forces.”

They allegedly signed a contract to buy the shells from the arms supplier Lviv Arsenal in August 2022, after which the defence ministry “transferred the full amount stipulated in the signed document to the company’s accounts”.

The money was then transferred to a foreign commercial company that was meant to supply the ammunition, but the SBU claims that “not a single artillery shell” was ever shipped to Ukraine.

The current and past chiefs of the defence ministry’s Department of Military and Technical Policy, Development of Armaments and Military Equipment, and the head of Lviv Arsenal are among the officials accused of taking part in the scam.

While trying to flee Ukraine, one of the suspects was apprehended by the SBU and is being held.

The general prosecutor of Ukraine claims that the pilfered money has been apprehended and will be reimbursed to the defence budget.

In recent months, Ukraine has seen a number of corruption scandals, some of which have included the army ministry.

In August 2023, Ukrainian President Volodymyr Zelenskyyy sacked all the officials in charge of military recruitment across the regions to end a system in which some people were being allowed to escape conscription.

Reining in corruption is one of the conditions the European Union has set for Ukraine as it seeks membership.