Ukraine says it uncovered $40 million corruption scheme in weapons procurement

Ukraine’s Security Service (SBU) said it has discovered a mass corruption scheme in the purchase of weapons by the country’s military amounting to nearly $40 million (1.5 billion Ukrainian hryvnia).

The SBU said the embezzlement involved the purchase of 100,000 mortar rounds for Ukraine’s Armed Forces in the fall of 2022.

Ukraine’s Defense Ministry paid nearly all of the funds to arms supplier Lviv Arsenal, but the SBU said the ammunition was never received. Instead, it said some of the funds had been transferred to foreign accounts, including in the Balkans.

The investigation found that former and current high-ranking defense officials, the head and chief commercial of Lviv Arsenal, and a representative of a foreign commercial group were involved in the fraud.

The uncovery of a mass corruption scheme will have consequences for Ukraine as it continues to resist Russia’s unrelenting invasion while trying to navigate a path into the European Union, which has made combating corruption a precondition of Ukraine’s future membership.

Yurii Zbitnev, CEO of Lviv Arsenal, told local media that the person responsible for the ammunitions contract has been fired and that the company is working with the defense ministry to return the funds to the state so they can be “used for more appropriate purposes.”

The SBU said five people have been indicted – and that one of them, a former defense ministry official, was detained while trying to cross the Ukrainian border. It said authorities were working to detain other suspects and that those charged could face up to 12 years in prison.

“The Ministry of Defence continues to fight uncompromisingly against those who embezzle from weapons procurement. We have no place for corrupt officials.” Ukraine’s Deputy Defense Minister Dmytro Klymenkov said in a statement Saturday.

Ukraine has been dogged by corruption scandals involving its defense ministry in recent years.

In December, a senior Ukrainian defense ministry official was detained over allegations he had embezzled 1.5 billion hryvnia ($40 million) in a separate case involving an artillery shells contract.

The reports came just months after Ukrainian President Volodymyr Zelensky dismissed all officials in charge of regional military recruitment centers. In September, Zelensky also fired then-Defense Minister Oleksii Reznikov, citing the need for “new approaches” amid continued scandals.