US$38 million embezzlement attempt thwarted in artillery shells procurement for Ukrainian forces
Through joint efforts of the Defence Ministry and law enforcement agencies, nearly UAH 1.5 billion or about US$38 million, unlawfully transferred abroad while purchasing a bulk shipment of ammunition, has been successfully reclaimed and returned to the state budget.
Source: Ukraine's Defence Ministry; Ukraine's Security Service (SSU); Prosecutor's Office of Ukraine; Ukrainska Pravda sources in law enforcement agencies.
Quote from the Prosecutor’s Office: "Thanks to coordinated actions by prosecutors from the Prosecutor General’s Office and SSU investigators, with the support of the Defence Ministry, a loss contract between the state and a special exporter for the purchase of a batch of artillery shells for the Armed Forces of Ukraine was terminated during the pre-trial investigation in January 2024. The funds in the amount of €35 million, equivalent to almost UAH 1.5 billion, have been refunded by the non-resident company to the coffers of the Defence Ministry."
Details: UP sources said that the contract in question is the one signed in December 2022 by Oleksandr Nahorskyi, Head of the Main Directorate for the Organisation of Production and Construction of Special Purpose Facilities of the Ministry of Defence of Ukraine. He entered into an additional agreement to the state contract to supply 155-mm ammunition produced by MES S.p.A, (Republic of Italy) with an intermediary company at inflated prices.
An audit was initiated after the SSU military counter-intelligence exposed an attempt to procure ammunition bypassing anti-corruption safeguards. The early audit findings confirmed all signs of misconduct.
The detention of Nahorskyi was reported on 22 December 2023.
The investigation indicates that the official attempted embezzlement of budgetary funds allocated for state orders to meet the needs of the Ukrainian Armed Forces. To achieve this, he orchestrated the transfer of nearly UAH 1.5 billion from the Defence Ministry's balance to foreign accounts of an affiliated intermediary firm for the procurement of artillery shells.
This amount exceeded the cost of another alternative contract, entered into by the newly established Defence Procurement Agency at that time, by 30%. Nahorskyi is charged with obstructing the lawful activities of the Armed Forces of Ukraine and other military formations.
He is currently in custody.
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