NABU, SAPO expose corruption in seized property sales

On July 12, 2022, the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO) notified the former head of the Asset Recovery and Management Agency (ARMA) of suspicion of abuse of power and embezzlement of over UAH 426 million. His actions fall under Part 5 Art. 191; Part 2 Art. 28, Part 2 Art. 364 of the Criminal Code of Ukraine.

Four more persons were notified of suspicion as well:

• the head of the Asset Management Department of ARMA - Part 2 Art. 28, Part 2 Art. 364 and Part 5 Art. 191 of the Criminal Code of Ukraine;
• an expert of the Enterprise Development Unit of SETAM SE - Part 5 Art. 27, Part 5 Art. 191, Part 5 Art. 27, Part 2 Art. 28 - Part 2 Art. 364 of the Criminal Code of Ukraine;
• an appraiser - Part 5 Art. 27, Part 5 Art. 191, Part 5 Art. 27, Part 2 Art. 28 - Part 2 Art. 364, Part 2 Art. 358, Part 3 Art. 358, Part 4 Art. 358 of the Criminal Code of Ukraine;
• the founder and director of a private company - Part 5 Art. 27, Part 2 Art. 28 - Part 2 Art. 364 of the Criminal Code of Ukraine.

As established, ARMA officials, in collusion with representatives of SETAM (a state enterprise dealing with the sale of seized property), private companies, and other inpiduals, organized a scheme to sell at a reduced cost via the SETAM trading platform property seized in criminal cases and handed over to ARMA.

The seized property was handed over to ARMA under the pretext of executing the decisions of the investigating judge. ARMA officials, in turn, issued conclusions that such assets are difficult to manage and store, or they quickly deteriorate and may lose their value. The property then was assessed by a company involved in the scheme at a significantly reduced value that was further applied during electronic auctions organized by SETAM. The participants in the scheme organized the bidding in such a way as to ensure the victory of a predetermined private company.

NABU and SAPO have obtained evidence of at least four episodes of such illegal activity during 2019:

• the sale of three plots of land in the Odesa region, purchased previously for the construction of Auchan shopping centers - sold 18 times cheaper than the market value;
• the sale of 2.6 thousand tons of river sand of medium and fine grain in the Kyiv region - 6 times cheaper than the market value;
• the sale of more than 4.5 thousand tons of urea - almost 5 times cheaper than the market value;
• the sale of grain, groats, and oil crops - four times cheaper than the market value.

As a result, in these four episodes alone, more than UAH 426 million in damage was caused.

In order to prevent the commission of the crime, NABU and SAPO initiated the seizure of the mentioned land plots and the money paid for the river sand.

The NABU Detectives are also investigating other episodes of corrupt activity in the sale of seized property.

According to Article 62 of the Constitution of Ukraine, a person is considered non-guilty in the commission of a crime and cannot be subject to criminal punishment until he or she is found guilty by court.