Employees from a Ukrainian arms firm conspired with Ministry of Defence officials to embezzle almost $40m earmarked to buy 100,000 mortar shells for the war with Russia, the Security Service of Ukraine (SBU) has reported.
The SBU said late Saturday that five people have been charged, with one person detained while trying to cross the Ukrainian border. If found guilty, they face up to 12 years in prison.
The announcement, which was confirmed by Ukraine’s Ministry of Defence, will have a deep impact on a country beleaguered by Russia’s nearly two-year-old invasion.
The SBU said an investigation had “exposed officials of the Ministry of Defence and managers of arms supplier Lviv Arsenal, who stole nearly 1.5 billion hryvnias [$40m] in the purchase of shells.”
“According to the investigation, former and current high-ranking officials of the Ministry of Defence and heads of affiliated companies are involved in the embezzlement,” the SBU said.
The deal involved the purchase of 100,000 mortar shells for the military, with a contract secured in August 2022 and payment made in advance.
But no arms were ever provided, the SBU statement said, with some funds then moved to other foreign accounts.
Five people have been given “notices of suspicion” – the first stage in Ukrainian legal proceedings – both in the ministry and the arms supplier, according to the security service’s statement.
One suspect, the SBU said, was detained while trying to cross the Ukrainian border.
Officials accused of participating 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.
According to Ukraine’s prosecutor general, the stolen funds have been seized and will be returned to the defence budget.
Corruption within Kyiv’s military has been a thorny issue both as it tries to maintain wartime public morale and present its case to join the European Union.
Last September, Defence Minister Oleksii Reznikov was dismissed amid various corruption cases.
Russia strikes wide swathes of Ukraine
The announcement came as Russia launched drone and missile attacks hitting both civilian and critical infrastructure across Ukraine, Kyiv’s Air Force said on Sunday.
The Air Force said Moscow attacked the central Poltava region with two ballistic missiles fired from its Iskander ballistic missile system. It also launched three surface-to-air missiles over the Donetsk region in the east.
In the southeast Zaporizhia region, Governor Yuri Malashko said an infrastructure site had been hit in a drone attack.
Filip Pronin, governor of the Poltava region, wrote on Telegram that the attack there hit an industrial site in the city of Kremenchuk, igniting a fire.
There were no preliminary reports of casualties, Kyiv said.
