NABU, SAPO uncover UAH 117 million cable procurement scheme: seven suspects

On 13 March 2024, NABU and SAPO exposed two organized groups involved in the embezzlement of funds from JSC Ukrzaliznytsia during the procurement of cable and wire products.

According to the investigation, in 2021, the leader of the first organized group, an entrepreneur, devised a scheme aimed at supplying products to Ukrzaliznytsia at inflated prices. To achieve this, he conspired with members of another organized group, which included, among others, an Ukrzaliznytsia official. Acting as a kind of Ukrzaliznytsia's "back office," members of the second organized group informally controlled its operations and could ensure the victory of "proper" companies in Ukrzaliznytsia tenders for a certain percentage of the contract value. 

Throughout 2021-2023, entrepreneur-controlled companies illegally won several UZ tenders for the supply of cable and wire products. With the assistance of Ukrzaliznytsia officials, these companies coordinated their actions and artificially inflated the expected product value . As a result, Ukrzaliznytsia entered into contracts with three entrepreneur-controlled companies, which supplied products at inflated prices. These companies did not manufacture the products, but purchased them through a network of intermediary firms from manufacturers, including controlled ones. This allowed to artificially inflate the value of the products.

Finally, Ukrzaliznytsia incurred losses totaling UAH 117 million, which the participants in the crime appropriated and used at their discretion.

Seven persons, members of both organized groups, have been notified of suspicion.

Their actions fall under Part 5 Art. 191, Part 2 Art. 15, Part 5 Art. 191 of the Criminal Code of Ukraine.

The efforts to identify other involved individuals are being taken.