NABU, SAPO reveal UAH 94.8 million transformers procurement scheme

NABU and SAPO have exposed an organized group, established in 2021 to control the activities and financial flows of Ukrzaliznytsia (Ukrainian Railways). 

According to the investigation, from June to December 2022, the group leader ensured the selection of a pre-determined company through controlled officials of Ukrzaliznytsia as a supplier of power transformers at inflated prices.

To that end, the group's leader organized the preparation and sending of a letter to Ukrzaliznytsia regarding "Threats to state security," which served as a ground for rejecting proposals from other companies offering more favorable pricing conditions. Yet, the real threat was that the group's leader ignored the Belarusian citizenship of the company's controller and his ties with russia.

Subsequently, the 'winner' purchased transformers through a registered laying company in Bulgaria from a manufacturer in Uzbekistan and resold them to Ukrzaliznytsia at a price artificially inflated nearly twice.

During 2022-2024, Ukrzaliznytsia incurred losses through overpayment for the transformers totaling UAH 94.8 million, which the participants of the crime appropriated and used at their discretion.

In total, there are 7 suspects so far:
• the leader of the organised group;
• two members of the organised group;
• the former deputy head of Ukrzaliznytsia "Production Support Center" branch;
• the deputy director for economic and information security of the Office of the Director for Economic and Information Security of Ukrzaliznytsia;
• a person acting on behalf of the owner of the supplier company;
• a subordinate of the group's leader.

The leader of the organized group has been also charged with embezzling UAH 117 million during the purchase of cables by Ukrzaliznytsia, which was revealed by NABU and SAPO this March.

The actions of the suspects fall under Part 3 Art. 27, Part 5 Art. 191, Part 5 Art. 27 and Part 5 Art. 191 of the Criminal Code of Ukraine.

Thanks to the actions of detectives and prosecutors, the court seized UAH 53 million in the bank accounts of the supplier company.

Efforts are under way to identify other episodes of organized group's criminal activity.