Passport corruption: state symbols multimillion-euro scheme exposed

The National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor’s Office have notified the former director of the state enterprise “Polygraph Combine” of suspicion of receiving an undue advantage in the form of copyrights to the design of security elements for foreign passports and ID cards (EUIPO registration), as well as laundering the income derived from their use.

Legal qualification: Part 4 of Article 368 and Part 3 of Article 209 of the Criminal Code of Ukraine.

According to the investigation, the suspect demanded unlawful benefits from a French company that had originally developed these security elements (such as stylized images of the Tryzub (Trident), the map of Ukraine, etc.) and used them in the production of holograms for Ukrainian document templates. In return, the company was allowed to supply its products to the state enterprise.

The supplies were made through an Estonian intermediary company controlled by the Polygraph Combine director. This company purchased the materials at market prices and resold them to the enterprise at 4–6 times the original cost. In this episode, NABU and SAPO had previously served charges on seven persons, including the scheme's organizer.

The unlawfully obtained copyrights were registered with this Estonian company in the EU Intellectual Property Office.

After the suspect was dismissed and a new management team began purchasing directly from the producer, the former director signed an agreement with the French company. Under this agreement, royalties were paid to the Estonian company for the use of the designs. These royalties were included in the price paid by Polygraph Combine for the holograms.

As a result, every Ukrainian citizen not only overpaid due to artificially inflated material costs but also "donated" to the suspect for his so-called "intellectual contribution."

Between 2018 and 2021, approximately EUR 7 million in royalties were transferred to the Estonian company’s accounts, which the suspect subsequently laundered through offshore companies he controlled. Part of this money—USD 124,790—ended up in his daughter’s bank account.

At the same time, NABU detectives took measures to dismantle the criminal scheme. In early 2022, the Ukrainian Government supported NABU’s initiative and changed the technical specifications for the design of security features in Ukrainian documents. Additionally, a letter was sent to the Cabinet of Ministers requesting the cancellation of the design registration featuring state symbols under the Estonian company’s name.

The investigation was significantly aided by constructive cooperation within an international joint investigative team composed of law enforcement agencies from Ukraine, Estonia, and France under the coordination of Eurojust.

Each country conducts its procedural actions regarding its citizens.

In France, law enforcement authorities are providing a legal assessment of the actions of individuals involved in the transfer of intellectual property rights.

In Estonia, five persons who helped manage the intermediary company and engaged in money laundering have already been held criminally liable, and an indictment has been submitted to the court.

In Ukraine, five citizens have been served with notices of suspicion.