Ukraine Uncovers $40 Million Defense Embezzlement Scheme

Ukrainian defense officials and corporate leaders sought to steal about $40 million through a fraudulent arms procurement scheme, the country’s main intelligence and security agency said Saturday.

The corruption allegations were confirmed by Ukraine’s defense ministry, which has served implicated officials with notices of suspicion.

They come as Republicans in the United States resist President Joe Biden‘s efforts to send more aid to Ukraine, and as former president Donald Trump, who has spoken out against US military support for Kyiv, appears to be on a glide path to the Republican nomination.

Ukraine’s SBU security service said that current and former senior officials of the defense ministry and heads of affiliated companies “attempted to steal almost UAH 1.5 billion ($40 million) from the budget by purchasing 100,000 mortar rounds for the Armed Forces.”

They allegedly signed a contract to buy the shells from the arms supplier Lviv Arsenal in August 2022, after which the defense ministry “transferred the full amount stipulated in the signed document to the company’s accounts.”

From there, the funds went to a foreign commercial entity that was supposed to deliver the ammunition, but “not a single artillery shell” was ever sent to Ukraine, according to the SBU.

Officials accused of participating in the scheme include the current and former heads of the defence ministry’s Department of Military and Technical Policy, Development of Armaments and Military Equipment, as well as the head of Lviv Arsenal.

One of the suspects was detained by the SBU while attempting to leave Ukraine and is currently in custody.

According to Ukraine’s prosecutor general, the stolen funds have been seized and will be returned to the defense budget.

Ukraine has weathered a series of corruption scandals in recent months, including several others within the defense ministry.

In August 2023, Ukrainian President Volodymyr Zelensky sacked all the officials in charge of military recruitment across the regions to end a system in which some people were being allowed to escape conscription.

Reining in corruption is one of the conditions the European Union has set for Ukraine as it seeks membership.

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