Fictitious companies and “laundering” of 500 million hryvnias: a large-scale corruption scheme in the defense sector was exposed in Ukraine
A scheme to launder defense funds worth over 578 million hryvnias through shell companies has been uncovered in Ukraine. Two organizers and a shadow accountant have already been notified of the suspicion, and the investigation is ongoing.
This was reported by the Prosecutor General’s Office.
According to the investigation, in 2023–2024, officials of one of the defense enterprises acted in collusion with the organizers of the so-called “conversion center.” Using forged documents, they created a mechanism for withdrawing and cashing state funds paid for defense orders.
During this period, state customers transferred over 2.5 billion hryvnias to the company for contracts to repair military equipment and machinery. Part of these funds were sent to the accounts of controlled fictitious companies under the guise of payment for the supply of spare parts for the Armed Forces of Ukraine.
“The money passed through a network of front persons and enterprises, was processed and returned to the organizers of the scheme. For money laundering services, the participants received a 4–5 percent commission,” the UCP reported.
The investigation found that the heads of the supplier companies actually live in the temporarily occupied territory and could not legally manage Ukrainian enterprises or sign contracts. Some of the “owners” of these companies do not exist at all according to foreign registers.
According to the conclusion of the State Tax Service of Ukraine, financial transactions worth over 576 million hryvnias have signs of money laundering.
The pre-trial investigation is being conducted by investigators of the Main Investigation Department of the National Police of Ukraine with operational support from the Department of Strategic Investigations of the NPU. The full range of persons involved in the scheme and the possibility of similar offenses in the field of defense procurement are being verified.
“In accordance with Article 62 of the Constitution of Ukraine, a person is considered innocent of committing a crime until proven guilty by a court verdict,” law enforcement agencies reminded.
By the way, NABU Director Semen Kryvonis stated about problems with tracking funds related to defense procurement .
As is known, the National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor’s Office are conducting a large-scale operation “Midas” to expose corruption in the energy sector . According to the investigation, the activities of a high-level criminal organization were established, which controlled financial flows and personnel decisions in state energy structures.
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