Corruption at Ukroboronprom: criminal group exposed embezzling UAH 32 million and attempting to embezzle UAH 19 million

Corruption at Ukroboronprom: criminal group exposed embezzling UAH 32 million and attempting to embezzle UAH 19 million.

NABU and SAPO have uncovered an organized criminal group that, between 2014 and 2019, embezzled funds from state enterprises within the “Ukroboronprom” concern, totaling over UAH 32 million, and attempted to misappropriate funds from these enterprises, amounting to more than UAH 19 million.

According to the investigation, the scheme involved a state-owned enterprise, a special exporter of military products and services, artificially engaging foreign companies to provide intermediary services in foreign economic contracts. These companies, registered in the United Kingdom and the Czech Republic, provided no actual services, while all work was carried out by the enterprise’s regular employees.

Between 2014 and 2019, the intermediaries were paid over USD 560,000 (equivalent to UAH 13.3 million) and nearly EUR 670,000 (equivalent to UAH 19.3 million). These funds were routed through accounts of fictitious companies and distributed among the members of the criminal group.

In addition, between 2016 and 2019, officials of the state-owned enterprise prepared primary documents indicating the need to pay non-resident companies approximately USD 172,000 (equivalent to UAH 4.4 million) and nearly EUR 500,000 (equivalent to UAH 14.7 million). However, these payments were not made because the participants in the scheme became aware of ongoing investigations by NABU and SAPO into similar schemes.

The suspects include:

• the former director of a state-owned enterprise (currently serving as a deputy general director at JSC “Ukrainian Defense Industry”);
• the former advisor to the director of the state-owned enterprise-special exporter;
• the beneficiary of a private company.

Legal qualification: Part 5 of Article 191, Part 3 of Article 209, Part 3 of Article 15, Part 5 of Article 191, Part 2 of Article 28, and Part 1 of Article 366 of the Criminal Code of Ukraine.

The former advisor to the director of the state-owned enterprise and the beneficiary of the private company are also suspects in another criminal proceeding by NABU and SAPO concerning the embezzlement of UAH 146 million from state enterprises within the “Ukroboronprom” concern.

The investigation is ongoing. Other instances of criminal activity are being established.