Ukraine's Security Service (SBU) says it has uncovered a large-scale embezzlement scheme to siphon off public funds earmarked for the purchase of food for the military as it battles to repel Moscow's nearly yearlong invasion.
The SBU said in a statement posted on Telegram on February 3 that as a result of the fraud, the Defense Ministry incurred losses of more than 119.5 million hryvnyas ($3.24 million).
The findings are part of a scandal that broke on January 22 when allegations surfaced in local media that the ministry was overpaying suppliers for food for troops. The supplier has said a technical mistake was to blame and no extra money had actually changed hands. The ministry said the accusations were baseless.
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Eradicating endemic corruption is one of the chief requirements presented by the European Union to Kyiv as Ukraine is pressing Brussels to speed up its accession into the 27-member bloc even as it is fighting Russian troops that invaded on February 24 last year.
On the eve of a meeting between EU leaders and Ukrainian officials on February 3, President Volodymyr Zelenskiy pledged "new steps" to continue "our fight against the internal enemy," a reference to the battle against graft. He did not give any details.
The SBU said in its statement explaining the scheme that officials from one ministry department made agreements with the heads of two commercial enterprises regarding the wholesale supply of food to locations where the military is deployed.
Funds from the ministry's budget were then transferred to the accounts of firms that "lacked a production base and technological equipment" to provide the relevant services.
"Instead of supplying the armed forces with the agreed quantities of food products, the participants in the fraudulent mechanism diverted the funds through a number of affiliated shadow companies," the statement said.
The SBU added that, based on evidence found, two heads of companies involved in the fraudulent scheme were notified of being suspected of "[illegal] appropriation, waste of property, or possession of [such property] through abuse of an official position."
It noted that SBU agents are still conducting an investigation to establish the involvement of Defense Ministry officials in any illegal activities.
"In addition, SBU officers exposed the commander of a military unit in the Kyiv region who embezzled almost 2.4 million hryvnyas ($68,000) allocated for military personnel's food," the statement said, adding that the commander had as accomplices four of his subordinates and businessmen who concealed the "kickbacks" through falsified documentation.
No names were given in the statement, which comes after a number of senior Ukrainian officials resigned or were fired beginning on January 24 as Zelenskiy vowed to eradicate corruption from his administration amid a high-profile graft scandal.