Ukraine says corrupt officials stole $40m from defence budget

Employees from a Ukrainian arms firm conspired with defence ministry officials to embezzle almost $40 million (€37 million) earmarked to buy 100,000 mortar shells for the war against Russia, Ukraine's security service reported.

The SSU said in a statement 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.

According to the statement, The SSU Military Counterintelligence uncovered this scheme in December 2023, then were able to detain a directorate head in the Minstry of Defence.

The investigation revealed that the official had "tried to misappropriate budget funds allocated for state military orders."

"The perpetrator organised a transfer of almost 1.5 billion Hryvinias (some €39 million) from the Ministry of Defence balance sheet to foreign accounts of an affiliated intermediary company to buy artillery shells," according to the SSU.

This amount was 30 percent higher than the value of an alternative contract concluded by the newly created Defence Procurement Agency.

After receiving payment, company employees were supposed to transfer the funds to a business registered abroad, which would then deliver the ammunition to Ukraine.

However, the goods were never delivered and the money was instead sent to various accounts in Ukraine and the Balkans, investigators said.

Officials from both bodies have demanded widespread anti-graft reforms before Kyiv can join them.

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