The Security Service of Ukraine (SSU) has uncovered a massive procurement fraud involving approximately $40 million, funds intended to purchase military ammunition.
The SSU announced that the scheme implicated several high-ranking officials within the Ministry of Defense and management figures from Lviv Arsenal, an arms supplier, the Boston Globe reported.
Lviv Arsenal received advance payment for the ammunition in August 2022, but the shells were never delivered.
Instead, the allocated funds intended for buying 100,000 mortar shells were transferred to a foreign commercial entity and subsequently rerouted to another affiliated organization in the Balkans without delivering any ammunition.
“After receiving the funds, the company’s management transferred part of the money to the balance sheet of a foreign commercial structure that was supposed to deliver the ordered ammunition to Ukraine,” the statement said.
“However, it did not send a single artillery shell to our country, and took the received funds into the shadows, transferring them to the accounts of another affiliated structure in the Balkans.”
The fraud is a blow to Ukraine’s military efforts and its reputation among international allies, notably in Washington and Brussels, where ongoing discussions about European Union membership and continued financial and military assistance are sensitive to issues of governance and corruption.
The SSU claimed that the embezzled funds were from the state budget, not foreign aid.
The SSU’s investigation has led to the issuance of “notices of suspicion” to five individuals, a precursor to formal legal proceedings in Ukraine. Among the accused are former and current officials from the Defense Ministry, including Oleksandr Liev and Toomas Nakhkur, as well as Yuriy Zbitnev, head of Lviv Arsenal and a former presidential candidate.
One suspect was detained while attempting to cross the Ukrainian border. Those involved face up to 12 years in prison if convicted.
Boston Globe reported:
The fraud took place under former defense minister Oleksii Reznikov, who was ousted last year amid several high-profile allegations of corruption in the ministry, particularly the purchase of food and jackets for the military at inflated prices. Reznikov, who wasn’t personally implicated in any malfeasance, declined to comment.
A defense official familiar with the matter, who spoke on the condition of anonymity because the official was not authorized to speak about the case to the media, said, “this is not a new case,” as the ministry filed a criminal report to law enforcement about the stolen $40 million in May 2023, after the shells were not delivered. Ukrainska Pravda, a Ukrainian news outlet, reported many details about the case in July.
The stolen funds have been seized, the agency said, adding that “the question of their return to the budget of Ukraine is being resolved.”
The Gateway Pundit previously reported that a recent Pentagon report has brought to light that over $1 billion in military aid sent to Ukraine by the United States has not been properly accounted for.
The Defense Department report, which was presented to Congress, reveals serious lapses in the tracking of critical weapons systems amidst heated congressional debates regarding additional support for Ukraine.
The unaccounted-for arsenal includes advanced shoulder-fired missiles, sophisticated kamikaze drones, and state-of-the-art night vision devices.
These items are classified as “high-risk” due to their advanced technology and the ease with which they could be transported and potentially fall into the wrong hands.
According to the report, of nearly 40,000 arms delivered to Ukraine, a substantial proportion has not been adequately monitored.
The report added, “It was beyond the scope of our evaluation to determine whether there has been diversion of such assistance. The DoD OIG now has personnel stationed in Ukraine, and the DoD OIG’s Defense Criminal Investigative Service continues to investigate allegations of criminal conduct with regard to U.S. security assistance to Ukraine.”
Austin, however, claimed that there was no evidence of misuse regarding the weapons in question.
Corruption is rampant in Ukraine.
According to an unnamed senior adviser to Zelenskyy, people at the top are “stealing” like there is no tomorrow and Ukraine’s president faces pressure to root out corruption as its allies continue to give the country everything it asks for, as reported by Time Magazine.
In January 2023, several high-ranking officials were removed from their positions. This group includes a top presidential adviser, four deputy ministers — two of whom were defense officials — and five regional governors.
As per the disclosure by senior government official Oleg Nemchinov, the following individuals have been relieved of their duties:
- Deputy Prosecutor General Oleskiy Symonenko
- Deputy Minister for Development of Communities and Territories Ivan Lukerya
- Deputy Minister for Development of Communities and Territories Vyacheslav Negoda
- Deputy Minister for Social Policy Vitaliy Muzychenko
- Regional Governors of Dnipropetrovsk, Zaporizhzhia, Kyiv, Sumy, and Kherson
The Ministry of Defense previously announced the resignation of Deputy Minister Vyacheslav Shapovalov, who was responsible for the army’s logistical support. This followed allegations of signing food contracts at exorbitant prices.
Defense Minister Oleksiy Reznikov resigned in September in what Reuters referred to as a “wartime shakeup” of Zelenskyy’s Cabinet.
Reports that people in the Ukrainian government are “stealing” come as President Joe Biden and U.S. lawmakers face pushback from taxpayers about their blank check policy toward funding a war with no end in sight.
Last year, the Pentagon revealed that an overestimation in the value of weapons sent to Ukraine over the past two years has resulted in an extra $6.2 billion of U.S. taxpayers’ money earmarked for the Eastern European country. This figure is approximately double what was originally estimated and allegedly will be utilized for future security packages.
Pentagon spokesperson Sabrina Singh provided clarification on the nature of the error, explaining that the military services had used the replacement cost rather than the book value of equipment pulled from Pentagon stocks and sent to Ukraine.
According to Singh, the error was identified during a detailed review of the accounting process.
“We discovered inconsistencies in equipment valuation for Ukraine. In a significant number of cases, services used replacement costs rather than net book value, thereby overestimating the value of the equipment drawn down from U.S. stock and provided to Ukraine,” Singh said at a news briefing.
This corruption scandal emerges at a critical juncture, with the Biden regime’s request for an additional $60 billion in aid for Ukraine facing scrutiny in Congress.
GOP lawmakers are demanding greater oversight to ensure the appropriate use of US funds. Since Russia’s invasion in February 2022, the US has committed over $46.3 billion in security assistance to Ukraine.
In July 2023, Senate Democrats rallied to oppose the establishment of a new office intended to audit taxpayers’ money sent to Ukraine as military aid.
The opposition to the creation of the Office of the Lead Inspector General for Ukraine Assistance saw forty-five Democrats, including every member of the Senate Armed Services Committee, voting against the amendment, according to New York Post.
Independent Senators Angus King (Maine) and Bernie Sanders (Vermont), as well as Republican Senator Rand Paul (Kentucky), also sided with the Democrats.
This move saw several key Democrats, including Jacky Rosen (Nevada), Joe Manchin (West Virginia), Sherrod Brown (Ohio), and Bob Casey (Pennsylvania), preventing the amendment from reaching the necessary 60-vote threshold.
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