NABU reports exposure of theft in food procurement for AFU worth UAH 733 mln
The National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO) have exposed a scheme to embezzle public funds during the purchase of food products for the Armed Forces of Ukraine by the Ministry of Defense of Ukraine in the context of a full-scale invasion by the Russian Federation.
"The following persons have been notified of suspicion: the former head of the Department of the Ministry of Defense of Ukraine; the owner of related supplier companies; two heads of supplier companies; an individual. Qualification: Part 5 of Article 191 (embezzlement), Part 2 of Article 15, Part 5 of Article 191 (attempted embezzlement), Part 3 of Article 209 (legalization) of the Criminal Code of Ukraine," the NABU website reported on Tuesday.
According to the investigation, in 2022-2023, the army was provided with food products through the purchase of so-called food sets, which provided the ability to order products from an approved catalog, which included 409 items. The most commonly used products, such as vegetables, cereals, meat, water, made up only 10% of the assortment. The rest, such as spices, gelatin or berries, were ordered rarely or never. The price of the set was formed taking into account all the items in the catalog and was their average cost.
"This allowed suppliers to manipulate prices: to inflate them for popular products and lower them for rarely used ones or those that cannot be ordered due to the seasonality of deliveries (cherries or apricots in winter). That is, at first glance, there were no violations, and the price of the set did not change. It’s true that potatoes, which were supplied in thousands of tonnes, were sold at exorbitant prices, and seasonal berries and fruits, which were almost never ordered, cost pennies," the report says.
According to NABU, as a result of such frauds during August-December 2022, two supplier companies controlled by one owner illegally received excess profits in the amount of more than UAH 733 million, which is confirmed by the conclusion of a comprehensive commodity and economic examination. Part of these funds were subsequently withdrawn under the guise of paying dividends and providing refundable financial assistance to related companies. The crime was facilitated by an official of the Ministry of Defense of Ukraine, the Bureau notes.
"After the pretrial investigation began in January 2023 and the dissemination of relevant information in the media, in particular on the purchase of eggs at UAH 17 per piece, the accomplices in the deal reduced prices for 11 of the most popular products. This prevented the theft of budget funds in the amount of UAH 788 million. In addition, after NABU and SAPO submitted proposals to eliminate the causes and conditions of the food transaction, the Ministry of Defense took appropriate measures: the procurement procedure has now changed, and separate pilot projects have been introduced," NABU said.
The investigation into the case continues, NABU and SAPO are taking measures to identify other persons involved in the criminal activities.