Senior Ukrainian Defense Ministry official arrested for alleged $40m embezzlement

A high-ranking official from Ukraine’s Defense Ministry has been apprehended on charges of embezzling 1.5 billion Ukrainian hryvnia ($40 million) linked to a contract for artillery shells, as reported by the Ukrainian Security Service (SBU).

The SBU reveals that the official initially entered into an agreement with a specialized export company to procure a large batch of artillery shells in December of the previous year. However, a more advantageous contract with the same manufacturer, omitting intermediaries, was later secured, leading to a considerable reduction in delivery time and product costs.

According to the SBU, the implicated defense official extended the original, more expensive contract, and funds totaling $40 million were diverted to the accounts of an affiliated foreign intermediary firm. Incriminating documents supporting these allegations have been reportedly found by the SBU.

The official, if found guilty, could face a maximum sentence of up to 15 years in prison. The Ukrainian Ministry of Defense is actively taking measures to recover the embezzled funds, as stated by Illarion Pavliuk, Head of the Press and Information Department of the Ukrainian Ministry of Defense.

Pavliuk explained that the contract, involving payment but no deliveries, is under scrutiny by legal experts exploring options to terminate the agreement and reclaim the misappropriated funds. Notably, this arrest follows the dismissal of former Defense Minister Oleksii Reznikov by Ukrainian President Volodymyr Zelensky in September, citing the need for “new approaches” amid corruption scandals within the Ministry of Defense.

Rustem Umerov, the former people’s deputy of Ukraine, was appointed as Reznikov’s replacement. Against the backdrop of increasing pressure from the United States, urging Ukraine to combat governmental corruption, Zelensky addressed these concerns during his visit to Washington DC, where he met with US Senators earlier this month. The EU’s decision to open membership talks with Ukraine has further intensified the focus on addressing corruption issues within the country.