Passport corruption: UAH 450 mln transborder scheme exposed (PHOTO)

NABU and SAPO have exposed a massive scheme of misappropriating funds from the state enterprise “Polygraph Combine “Ukraina” worth over UAH 450 million. This is the result of cooperation within an international investigative group comprising investigators from Ukraine, Estonia, and France under the auspices of Eurojust.

On July 21, 2023, five individuals were notified of suspicion: the former director and former head of the department of the state enterprise, and a private person involved in the crime. Additionally, documents were sent to Estonia to notify two of its citizens (the director and manager of a controlled company) of suspicion. The charges are based on Part 5 Article 191 of the Criminal Code of Ukraine, and the former director is also charged with money laundering under Part 3 Article 209 of the Criminal Code of Ukraine.

Scheme

In 2013, the then combine's head bought an Estonian company through proxy persons and insisted on foreign partners cooperating through this "convenient" company for supplying products. Subsequently, the company acted as an intermediary for procuring materials used in the production of official documents such as passports, ID cards, and driver's licenses. The intermediary company bought the materials directly from manufacturers and then resold them to the state enterprise at a price inflated by 4-6 times. During 2013-2016, the criminal group embezzled approximately half a billion hryvnias through this scheme.

Money Laundering

The combine's director disguised the sale of 45% of his shares in a non-functioning company (with an actual market value of around USD 100,000) to another company under his control for USD 1.35 million. He then declared the money in order to use it legally. Part of the money, USD 150,000, was transferred directly to the accounts of the director's close relatives.

Additionally, the former director patented intellectual property rights to protective elements used in Ukrainian passports with the company under his control. This way, every citizen receiving documents not only overpaid due to inflated prices but also "donated" to the official for his "intellectual contribution."

However, investigators took measures to dismantle this scheme. At the beginning of 2022, the government supported NABU's initiative and changed technical requirements and images of protective elements in Ukrainian documents. This allowed getting rid of dependence on the director's "intellectual work."

International cooperation

Effective investigation by NABU and SAPO was aided by constructive cooperation with Estonian colleagues, including comprehensive investigative actions on the territories of both countries.

Estonia

Evidence got from Estonia allowed establishing all the details of the crime scheme and money laundering. As part of the joint investigation, Estonian law enforcement authorities held four individuals accountable for money laundering from the combine. Among them were the director and manager of the company controlled by the former director, as well as two other accomplices.

France

French law enforcement is currently working on verifying its citizens' involvement in this crime.

Cooperation in Ukraine

The State Financial Monitoring Service of Ukraine actively participated in tracking and analyzing banking transactions.