Ukraine uncovers $40 million arms corruption scandal

Investigation launched into alleged plot to embezzle funds set aside to purchase mortar shells

Senior defence officials are among those suspected of embezzlement, Kyiv's security service says. AP

Ukraine's security service, the SBU, says it has uncovered an arms corruption plot to embezzle $40 million of defence funding set aside to procure 100,000 mortar shells as the war with Russia rages on.

Five senior defence officials and business leaders are suspected of involvement in the plot.

Top Pentagon officials warned this week that Ukraine's troops are running out of ammunition after almost two years of war with Russia.

On Saturday, five people were served with “notices of suspicion”, the first stage in Ukrainian legal proceedings, in connection with the fraud, including one person who had attempted to leave the country.

The suspects are accused of having “attempted to steal almost 1.5 billion hryvnia [$40 million] from the budget by purchasing 100,000 mortar rounds for the Armed Forces”, the SBU said.

It is alleged they signed a contract to buy the shells from Lviv Arsenal in August 2022, after which the Defence Ministry “transferred the full amount stipulated in the signed document to the company's accounts”.

The funds were then sent to a foreign company that was supposed to deliver the ammunition, but “not a single artillery shell” was ever sent to Ukraine, the SBU said.

Among the officials accused of participating in the scheme are the current and former heads of the Defence Ministry's departments of military and technical policy, and development of armaments and military equipment, as well as the head of Lviv Arsenal.

Prosecutors say the stolen funds have been seized and will be returned to the defence budget.

Ukraine has weathered a series of corruption scandals in recent months, including within the Defence Ministry.

In August last year, President Volodymyr Zelenskyy sacked all regional officials in charge of military recruitment in a bid to put an end to a system in which some people were being allowed to evade conscription.

More than 30 people faced criminal charges, accused of taking bribes and smuggling people out of the country in a scandal Mr Zelenskyy described as “high treason”.

Other scandals have involved the procurement of goods and equipment for the army at inflated prices.

Ukraine is fighting to root out corruption as it presses forward in its bid to secure membership in the EU. The bloc has stipulated that fighting corruption is one of the conditions of membership.

Kyiv also faces a further headache as it continues to push for more support in defending against the Russian invasion, as Republicans in the US continue to resist President Joe Biden's efforts to send more military aid to the country.

Over the weekend, Russia launched drone and missile attacks at civilian and critical infrastructure across Ukraine, the Ukrainian Air Force said on Sunday.

Russia and Ukraine have increased their air attacks on each other's territory in recent months, aiming to hit critical military, energy and transport infrastructure.

The air force said Russia attacked the central Poltava region with two ballistic missiles, as well as firing three surface-to-air missiles over the eastern Donetsk region.

Filip Pronin, governor of Poltava region, wrote on Telegram that the Russian missiles had struck an industrial site in the city of Kremenchuk, causing a fire.

Further south-east, in Zaporizhzhia region, governor Yuri Malashko said a drone attack had hit infrastructure.

Russia launched eight drones on Saturday night, and Ukraine's air defence systems destroyed four of them, the air force said.