Ukrainian defense scandal: Officials pocket $20M from inflated food deals
A scandal has erupted in the Ukrainian Ministry of Defense. A group of several food suppliers and ministry officials profited from delivering supplies meant for soldiers on the front lines. They have been accused of embezzling 733 million hryvnias. How did this happen? They sold selected products at blatantly inflated prices.
What do you need to know?
- Who was charged? In this case, the former head of a department within the Ministry of Defense of Ukraine, the owner of food-supplying companies, and their managers were charged.
- What was the operation scheme? Product prices were manipulated: some prices were inflated multiple times.
- Investigation outcome? Further budget losses amounting to 788 million hryvnias were prevented.
What mechanisms enabled the abuses?
An investigation conducted by the National Anti-Corruption Bureau of Ukraine (NABU) and the Special Anti-Corruption Prosecutor's Office (SAP) revealed that in 2022-2023, food deliveries for the Ukrainian military were carried out through the purchase of so-called food kits.
These kits contained 409 items, of which only 10 percent were actually delivered to the front. "This allowed suppliers to manipulate prices: inflating them on popular products and deflating them on those that were not delivered," explains the investigative report. Officially, everything matched—the package price did not change.
What were the consequences for the budget?
As a result of this fraud, two companies controlled by one owner gained over 733 million hryvnias in extraordinary profits from August to December 2022. Part of these funds was siphoned off as dividends and financial aid for related companies. "This money could have been used to purchase hotels in Croatia and other properties," investigators reported.
Investigators claim the crime was possible because a Ministry of Defense official "did not notice" the non-standard prices in the catalog during contract signings.
What actions were taken after the scandal was revealed?
After the investigation began in January 2023 and the case was publicized in the media—including information about purchasing eggs for 17 hryvnias each (an egg could be bought in the store for much less, editor's note)—participants in this scheme lowered the prices of the 11 most sought-after products. "This prevented the siphoning of the budget by an amount of 788 million hryvnias," the investigators emphasize.
Source: pravda.com.ua
