Ukraine Exposes $40m Arms Corruption Scheme as Russia-Ukraine Conflict Continues

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Ukraine’s Security Service has reported that five people have been charged in connection with a plot to embezzle funds earmarked for the purchase of 100,000 mortar shells. The individuals, including employees from a Ukrainian arms firm and Ministry of Defence officials, are accused of conspiring to steal almost $40m intended for the purchase of shells for the war with Russia. One person has been detained while attempting to cross the Ukrainian border and, if found guilty, the accused could face up to 12 years in prison.

The investigation revealed that officials of the Ministry of Defence and managers of arms supplier Lviv Arsenal were involved in the embezzlement, with approximately 1.5 billion hryvnias [$40m] stolen in the purchase of shells. The deal, which was secured in August 2022, involved the pre-payment for 100,000 mortar shells, but no arms were ever provided, and some funds were moved to foreign accounts. Those implicated 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.

The stolen funds have been seized and will be returned to the defence budget, according to Ukraine’s prosecutor general. Corruption within the military has been a persistent issue for Ukraine, particularly as the country faces ongoing conflict with Russia. The announcement of the charges came as Russia launched drone and missile attacks, striking both civilian and critical infrastructure across Ukraine. This included attacks using ballistic missiles and drones in various regions, though there were no initial reports of casualties.

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