Backpacks' case No politics - just the facts
Details of the NABU and the SAPO exposing and investigating the corrupt scheme of public funds embezzlement during purchase of backpacks for the Ministry of Internal Affairs of Ukraine (MIA)
What happened
In 2015 the Ministry of Internal Affairs of Ukraine bought backpacks at price which was significantly higher than the average. The investigation revealed that the goods were not delivered on time and the backpacks did not meet the requirements listed by the MIA. As a result, the State suffered losses of about 14.5 million UAH (690 thousand USD).
Below you will find the description of the key events of one of the most resonant corruption cases: from the concept of crime to conflicts in the court.
ORGANIZATION OF CRIME
Characters in the scene:
«Ch» - the Deputy Minister of Internal Affairs of Ukraine
«A» - a private person
«L» - an entrepreneur from Kharkiv
«Sh» - the First Deputy Director of the Material Support Department of the Ministry of Internal Affairs of UkraineОсоба «Ч» — заступник міністра внутрішніх справ України
I. The criminal plan
In autumn 2014 "A" and "Ch" (who at that time of committing a crime was the Deputy Minister of Internal Affairs of Ukraine) decided on the organization of the corruption scheme. According to the agreement, the MIA had to purchase backpacks made by the company controlled by "A" and the backpacks should be sewed at the lowest cost. "L" had to provide the backpacks sewing.
In December 2014 the negotiations were in progress. During a conversation in the office of the Deputy Minister, "A" announced that by the end of 2014 he would provide sewing of 100 backpacks only. Due to this fact, the characters in the scene agreed to supply a larger party next year.
At the same time, the person "Ch" called his subordinate (person "Sh") and ordered him to instruct the employees of the Territorial Divisions of the Ministry of Internal Affairs of Ukraine to prepare documents for justifying the need of the backpacks for special forces involved in the tasks in the zone of ATO.
COMMITTING A CRIME
Characters in the scene:
«Ch» - the Deputy Minister of Internal Affairs of Ukraine
«A» - a private person
«L» - an entrepreneur from Kharkiv
Members of the Committee on Competitive Bidding
II. Purchase approval
In January 2015 the Deputy Minister of the MIA agreed to make changes to the annual plan in a part of goods' purchase, and this ensured possibility of the backpacks' purchase by negotiating procedure (2 lots for 3,000 backpacks, the expected value of 2,024 UAH per unit).
Interesting fact
The Deputy Minister and the Head of the Committee on Competitive Bidding knew that in October 2014 the Ministry of Internal Affairs purchased 6,244 backpacks at a price of 1,785 UAH per unit. The significant part of them were still stocked in a warehouse (as of March 2015 – 2,218 backpacks were in stock, as of December 28, 2015 – 1,049 backpacks).
At the time of purchase among all Territorial Departments of the MIA only the Ministry of Internal Affairs in Kyiv filed a request to purchase 40 backpacks to the Ministry of Internal Affairs of Ukraine.
Then, the Committee on Competitive Bidding decided to include in the annual procurement plan for 2015 the purchase of 6,000 backpacks with total price of 12 145 140 UAH (2,024 UAH per unit).
8 out of 10 Committee members presented at the meeting were employees of subordinate of Deputy Minister of Subpisions of the MIA.
The MIA announced a tender for the purchase of backpacks and send invitations to business entities to participate in the negotiation procedure.
Interesting fact
The invitation to participate in the tender was not sent to the Limited liability company (LLC) Dniprovend (winner of the tender). Meanwhile, at the request of "L", third parties already made a series of fictitious documents for LLC Dniprovend to participate in the procurement procedure.
In February the agreements were signed. The entrepreneur submitted fake documents to the bidding committee and provided a sample of a backpack allegedly made by the LLC Dniprovend. After a meeting of the Committee, the representative of the State Research Institute of the Ministry of Internal Affairs of Ukraine confirmed that the backpack met all technical requirements. But, in fact, the abovementioned backpack did not meet the requirements: neither the general design features, nor the dimensional, nor the composition of the material.
On February 16, 2015, the Committee on Competitive Bidding coordinated the proposals of the LLC Dniprovend for the purchase of 5,000 backpacks with the delivery date until April 1, 2015, at a price of UAH 2,899 per unit of goods.
What happened next: the Deputy Minister signed an agreement on the purchase of backpacks by LLC Dniprovend. "L" arrived to the MIA and gave a fake document on behalf of the Director of the LLC Dniprovend to represent the interests of the abovementioned enterprise. «L» received four copies of the agreement for the purchase of 5,000 backpacks in the amount of 14 million 495 thousand UAH. Then, the entrepreneur returned the documents to the MIA with fake signatures and seals. The documents were registered.
ІІІ. Fulfillment of a criminal agreement
In March, the sewing of backpacks was continued. The private persons and the state enterprises of the State Penitentiary Service were involved in the process for minimizing the costs. The visibility of the legality of the delivery was provided by the documents with false seals and signatures of the formal owner of the LLC Dniprovend.
The Deputy Minister of the MIA signed payment orders, according to which the MIA transferred to the account of the LLC Dniprovend 1.44 mln UAH and 2.319 mln UAH.
In May 2015, the last batch of backpacks was sewn. The backpacks were delivered to the Central Resource Base of the Ministry of Internal Affairs of Ukraine in Kyiv. According to the contract, backpacks were to be delivered by April 1. The employees of the Central Resource Base rewrote the registration documents for vehicles arriving to the territory in order to comply with the acts of acceptance of backpacks from LLC Dniprovend.
After signing the last payment order, on the day of the actual payment to the account of LLC Dniprovend on May 14, the Cabinet of Ministers of Ukraine adopted the resignation of the Deputy Minister of Internal Affairs.
EXPOSION OF A CRIME
Characters in the scene:
Investigators of the Main Military Prosecutor's Office of Ukraine
The NABU Detectives
ІV. Registration of criminal proceeding
Criminal proceeding under Part 2 Article 364 of the Criminal Code of Ukraine ('Abuse of power or official position') was entered into the Unified Register of Pre-trial Investigations on July 7, 2015. However, the NABU Detectives started the investigation 8 months later. That is how it happened...
In February 2016, the so-called 'backpacks case' became public. The editors of the TV-show 'Scheme' (a joint project of Radio Svoboda and TV channel 'UA: Pershyj') paid attention on the Internet video made in one of the offices in the MIA. The video featured the discussion of the purchase of the backpacks for the MIA by the predetermined persons.
Journalists analysed the dialogues on the video, compared them with the purchase of the backpacks for the budget funds happening at that time, and finally made the case public.
In March 2016 the NABU Detectives registered criminal proceedings as of the facts of committing a crime under Part 5 of Article 191 of the Criminal Code of Ukraine ('Misappropriation, embezzlement or conversion of property by abuse of official position). In April 2016 the NABU received materials of the criminal proceeding from the Department of Investigations of the Military Prosecutor's Office of Ukraine. Subsequently, the NABU joined the proceedings and started investigation.
INVESTIGATION OF THE CRIME
Characters in the scene:
«Ch» - the Deputy Minister of Internal Affairs of Ukraine
«A» - a private person
«L» - an entrepreneur from Kharkiv
«Sh» - the First Deputy Director of the Department of material support of the MIA.
The NABU detectives, the SAPO prosecutors, the court
V. Collecting the evidence
At the beginning of May 2016 the Solomyansky District Court gave a permission to conduct an unscheduled external audit on specific issues of financial and economic activity of the MIA. The audit revealed the fact of non-compliance of the LLC Dniprovend to the qualification requirements of the backpacks supplier.
On May 12 according to the court decisions the NABU Detectives seize the samples of the backpacks supplied in February 2015 from the Main Department of the National Police in Kyiv and the Main Department of the National Police in the Kyiv region.
In June being questioned as a witness, the formal Director of the LLC Dniprovend said that he was not aware of the participation of his company in the purchase of the backpacks, he did not sign the tender documents, was not familiar with "L" who represented the LLC during the tender, did not issue a power of attorney.
In August-September the first examinations appeared. On August 3, 2016, the NABU detectives receive examination results of the Kiev Research Institute of Forensic Expertise (KNSISE). According to it, the backpacks supplied to the MIA did not meet the technical requirements for the object of procurement in most of the signs of structural details and elements.
The examination of video and audio showed that the video obtained during cover activities in the office of the former Deputy Minister of the Internal Affairs was a record of the "Ch" voice.
The handwriting examination confirmed that the signature on behalf of the formal Director of the LLC Dniprovend were made by another person in the documents submitted for the participation in the procurement of backpacks.
Interesting facts
In September-October, based on the court decisions, the NABU Detectives seized the samples of backpacks from 17 Main Departments of the National Police and the Central Support Office of the MIA.
In December 2016 the court convicted the formal director of the LLC Dniprovend of committing a crime under Part 2 Article 28, Part 1 Article 205 of the Criminal Code of Ukraine ("Fictitious Entrepreneurship").
In addition, the new examinations were received.
According to the examination, the supplied backpacks were hand-sewn and contained defects. As of February 2015 the market price of the backpacks supplied was 555 UAH only.
According to forensic examination the State suffered losses in the amount of more than 14.5 million UAH caused by the agreement with the LLC Dniprovend.
On January 16, 2017, another examination of video and audio was received. It was established that the video was the record of the voice of "A". It was obtained during the cover search activities in the office of the former Deputy Minister of Internal Affairs.
According to examination of the video and the audio, received on March 30, 2017, there were not interruptions of the recording, as well as signs of discrepancy between audio and video tracks in files that appeared on the results of undercover activities in the office of the former Deputy Minister of the Internal Affairs.
On June 27, 2017, the Detectives received the examination, that confirmed the results of the previous expertise regarding the amount of the State losses caused by the contract for the purchase of backpacks between the LLC Dniprovend and the MIA.
In August during interrogation the former First Deputy Director of the Department of material support of the MIA ('Sh') confirmed the content of the conversation on the purchase of the backpacks, which was recorded on the video obtained as a result of undercover activities in the office of the former Deputy Minister of the Internal Affairs.
VІ. Detention and suspicion
In October 2017 the NABU Detectives and the SAPO prosecutors decided on sufficiency of the evidence and prepared drafts of the first suspicions for the criminals.
On October 31, 2017, the NABU Detectives conducted a number of searches and as a result three persons were detained on suspicion of embezzlement of more than 14 million UAH. The detained people are the former Deputy Minister of Internal Affairs of Ukraine, the representative of the winning company of the backpacks procurement and a private person.
The NABU investigation are so resonant due to the fact that one of the alleged participants of the crime is a son of the Minister of Interior Affairs.
Interesting facts
At the searches, which took place in Kharkiv at the residence of alleged participants of the crime, the police surrounded the perimeter of the building and blocked the exit of the NABU employees. The police representatives had two different explanations: 1 - the building was mined; 2 - the training was conducted.
In the same day, the MIA spread the statement determining the NABU activities to be political.
On November 1, 2017, the NABU Detectives conducted searches in Kyiv and Kyiv region at the place of registration and residence of a number of the National Police officials, who control the logistics and technical support of the departments of the MIA.
The court chose preventive measures for the detainees in the form of a personal commitment.
On November 7, 2017, the SAPO prosecutors appealed against the court decisions as of the chosen preventive measures in the form of personal commitment.