СORRUPTION IN RESTORATION SECTOR
The funds and resources allocated by international partners for Ukraine's recovery and reconstruction entice corrupt officials.
An organized group, comprised of an influential businessman, four of his accomplices, and the first deputy general director of the municipal enterprise "Kharkiv Heating Networks," embezzled UAH 22 million provided by the World Bank. This amount is part of a larger sum, UAH 159.5 million, allocated for the restoration of critical infrastructure in the Kharkiv region, which the scheme participants misappropriated. They secured direct contracts (bypassing tenders) between the utility company and companies controlled by the businessman for the supply of pipe products, windows, and technical salt. Subsequently, these companies purchased all items from manufacturers through a number of straw companies and resold them to the utility company at more than twice the price. In April 2024, NABU and SAPO served charges on all participants of the corruption scheme. The investigation is ongoing.
In April, an embezzlement scheme implemented during the provision of services for technical inspection of objects damaged by russia's aggression in the Kherson region was uncovered. The head of one of the departments of the Kherson Regional State Administration, in collusion with the owner and manager of a private company, attempted to enrich themselves by over UAH 7.7 million. They organized an overestimation of the cost of technical inspection of 107 objects of social infrastructure by more than 15 times. The contract was concluded for over UAH 9.9 million, while the actual cost of the services was just UAH 534,000. All involved in the case were notified of suspicion.
LAND SCHEMES
Anticorruption agencies successfully counteract land embezzlement and illegal seizure of land plots across various regions of Ukraine.
The former Minister of Agrarian Policy and Food, the ex-head of the State Geocadastre, and other officials were also notified of suspicion. According to the investigators, they illegally seized 1,250 land plots totaling approximately 2,500 hectares, valued at UAH 291 million.
The scheme was carried out in the Sumy region. The former owner of several agricultural companies, who later became a minister, conspired with the head of the State Geocadastre of Ukraine and curators of State Geocadastre regional offices to seize the land of two state-owned enterprises. Initially, they destroyed the documents granting permanent land use. Then, a State Geocadastre regional office drew up a report on the unauthorized occupation of these plots by state-owned enterprises. Subsequently, the land was transferred to private ownership of pre-determined individuals, who signed lease agreements with the agroholding of the crime's co-organizer even before receiving the parcels.
Overall, 13 people were notified of suspicion in this criminal case. NABU and SAPO prevented the appropriation of another 3,200 hectares of land by initiating an arrest on the property.
In the Zakarpattia region, NABU and SAPO, together with the SSU, exposed a city mayor and the head of the district council in Zakarpattia, who sold a valuable parcel of over 3 hectares at a significantly reduced price to a private company. According to the investigation, the actual controller of this company was the district council head, a former MP.
The land with a market value of UAH 84.6 million was sold for just UAH 9.6 million. Thus, the territorial community suffered losses of almost UAH 75 million. As established, the sale was based on a falsified monetary valuation, in which the price of the plot was underestimated. For this conclusion, the owners of the evaluator firm received a bribe. Three officials and three persons involved in the evaluation became suspects.
CORRUPTION IN REGIONS
Deputies and officials of regional councils have repeatedly become the "heroes" of NABU and SAPO investigations.
In February, the deputy head of the Zaporizhzhia Regional Council, his assistant, and a deputy of this regional council were notified of suspicion. In 2023-2024, the suspects repeatedly bribed one of the directors of the regional hospital to ensure the victory of pre-determined companies in its tenders and to open an account for the hospital in a designated bank and place funds on it. Both were caught red-handed immediately after providing part of the UAH 650,000 bribe.
In the spring, NABU and SAPO, together with the SSU, exposed two deputies of the Sumy Regional Council for offering and giving USD 100,000 in bribe. For this amount, the head of the Sumy City Military Administration was supposed to facilitate the enlargement of the local hospital by merging other medical institutions with it and appointing one of the deputies as the chief doctor. The deputies also offered the official 10-20% of the budget funding allocated for the newly created medical institution. The deputies were caught red-handed while transferring the first tranche of USD 50,000.
MISAPPROPRIATION OF DEFENSE FUNDS
A private company failed to deliver five thousand bulletproof vests to the Ministry of Defense. This is 50% of the total order for which the state paid in full EUR 5.7 million. The investigation established that the money paid for the undelivered products were spent by the participants in the scheme on luxury cars and real estate abroad. In March, at the request of NABU and SAPO, three individuals involved in the misappropriation and legalization of defense funds, including the owner of the supplier company, were detained in the territory of the Republic of Finland. The real estate of one of the detainees, a Finnish citizen, was seized. The collected evidence will be used by NABU detectives in their own criminal investigation into the misappropriation of MoD funds during the procurement of bulletproof vests.
CORRUPTION AT STATE-OWNED ENTERPRISES
The first half of 2024 proved to be highly productive for anti-corruption agencies in uncovering corruption crimes at state-owned enterprises.
NABU and SAPO exposed an electricity scheme that led to millions in losses for Ukrenergo NPC. As established, despite pending debt to the state-owned company, one of the traders purchased electricity worth UAH 716 million from it using commercial bank guarantees issued in violation of procedure. The electricity was then sold, the funds appeared in the accounts of a controlled foreign company, and Ukrenergo received nothing. Four scheme participants were notified of suspicion. The siphoned UAH 700 million was seized by the court.
A criminal group including two deputies of the Odesa Regional Council was uncovered. They illegally seized 32 lighter ships from PJSC "Ukrainian Danube Shipping Company" and transferred them to Turkey, where they were dismantled and reassambled into 12 larger barges. The barges were then towed back to Ukraine and registered under companies controlled by the group. This caused losses to the state of over UAH 80 million. Six members of the criminal group became suspects, and the newly constructed barges were handed over to ARMA.
NABU and SAPO served charges on a former and a current officials of Ukrgazvydobuvannia JSC. As established, during the conclusion and execution of a contract to enhance natural gas production between Ukrgazvydobuvannia and a private foreign company, they engaged in actions that made the state-owned company pay for gas at significantly higher rates. As a result, Ukrgazvydobuvannia incurred losses of UAH 211 million.
Detectives uncovered a scheme to misappropriate state funds during the purchase of computer equipment at a state institution of the Ministry of Internal Affairs. Its ex-head along with the owner and director of a private enterprise organized the procurement through a shell company. As a result, the equipment was purchased at nearly three times the initial price. The overpayment amounted to UAH 16.6 million, which the scheme participants illegally appropriated.
Three persons were exposed soliciting a bribe of nearly half a million US dollars from a businessman for influencing the director of the State Enterprise "Chornomorsk Commercial Sea Port." In particular, the head of the legal unit of the Chornomorsk Sea Port, in collusion with a former freelance advisor to the port director and the director of one of the contractors, promised to facilitate the signing of an agreement between the port and the company to transfer the right to claim a debt in favor of another enterprise. All three became suspects.
CORRUPTION AT UKRZALIZNYTSIA
In the first half of 2024, NABU and SAPO continued to fight corruption at Ukrzaliznytsia in particular with the assistance of its management.
Two organized groups embezzled UAH 117 million from the state-owned enterprise during the purchase of cable and wiring products. The head of the first, an entrepreneur, devised a scheme to supply products at inflated prices, and a second organized group, which included officials from Ukrzaliznytsia, ensured that the entrepreneur's companies won tenders for a percentage of the procurement amount. Seven persons, members of both organized groups, were notified of suspicion, while other individuals involved in the crime are being identified.
Another criminal group embezzled UAH 94.8 million already during the full-scale war. The group's leader ensured the selection of a pre-determined company through Ukrzaliznytsia officials as a supplier of power transformers. This company, through a Bulgarian shell firm, sold transformers to Ukrzaliznytsia at almost double the market price. Seven persons got charged, including the leader, a co-organizer, and two members of the group.
A similar scheme was used during the procurement of pneumatic tools. Members of another organized group ensured the victory of a company in a tender that supplied Ukrzaliznytsia branches with products at inflated prices. The overpayment amounted to UAH 36 million, which the group members appropriated and used at their discretion. Nine people were notified of suspicion.
One more group of five persons was exposed with the assistance of Ukrzaliznytsia management. They embezzled UAH 17 million from Ukrzaliznytsia during the repair of track machines. According to the scheme, pre-determined companies were selected as winners of repair service contracts. These companies did not perform the repairs and forged documents that allegedly proved the completion of works. All participants in the scheme became suspects.
Overall, in the first half of 2024, in NABU and SAPO probes into corruption at Ukrzaliznytsia, UAH 262 million, USD 1.3 million, and EUR 754,000 were seized in the accounts of suspects and their controlled entities. The court also seized a significant number of movable and immovable property
CORRUPTION AT CUSTOMS
NABU and SAPO, in cooperation with the competent authorities of Turkey, Bulgaria, Romania, the Czech Republic, and Slovakia, exposed a criminal organization that caused almost UAH 290 million in losses to the state by minimizing customs payments.
It included prominent entrepreneurs from Chernivtsi, a former deputy of the Chernivtsi Regional Council, and officials from Chernivtsi Customs, notably its former head. To minimize customs payments, the participants used the scheme of so-called 'gray' imports. In particular, they organized the illegal importation of high-value goods (clothing, footwear, accessories) from Turkey through the Vadul-Siret customs post, masking them by cover goods with significantly lower customs value. In addition, customs officials occasionally classified transport with goods as empty or as carrying items for the personal use of the driver.
NABU and SAPO also did not overlook the beating, ordered by a member of the criminal organization, of local journalists who publicized its illegal activities.
Three Chernivtsi Сustoms officials and eight other persons were notified of suspicion. The investigation is ongoing. NABU and SAPO are identifying other possible members of the criminal organization.
CORRUPTION ABUSES BY CURRENT MPS AND OFFICIALS
NABU and SAPO brought charges against an incumbent MP with illicit enrichment reaching UAH 11 million. He acquired assets worth UAH 25 million, while his family's official income and savings amounted to no more than UAH 14 million. The property in question is 3 land plots in the Kyiv region, 5 apartments in the capital, 2 non-residential premises, as well as a Tesla and a Mersedes-Benz. To conceal the assets, the MP registered them with close relatives. The crime was uncovered after a journalistic investigation by the Bihus.Info team, as well as with the facilitation of the National Agency on Corruption Prevention.
The former deputy head of the Office of the President of Ukraine (2019-2024) was also notified of suspicion of illicit enrichment for UAH 15.7 million. The official acquired assets worth UAH 17.1 million, while his savings and official income during the relevant period amounted to UAH 1.3 million. He acquired Mercedes-Benz and Volkswagen cars, Honda and BMW motorcycles, as well as an apartment in Lviv, a land plot in the Zakarpattia region, and three parking spaces in Kyiv. He registered most of these assets with his brother and a friend, retaining the right to dispose of them in full. The crime was uncovered following an investigation by Ukrainska Pravda journalists and with the help of the National Agency for Corruption Prevention.
NABU and SAPO also facilitated the revelation of funds embezzlement within the Security Service. The Main Directorate of Internal Security and the SSU investigators, in cooperation with detectives and prosecutors, established that the former head of the Department of Economic Support and his first deputy organized a scheme to appropriate funds allocated to purchase fuel. The gas and lubricants were procured at inflated prices through controlled companies, resulting in an overpayment of over UAH 26 million.
MISAPPROPRIATION OF CONFISCATED OIL PRODUCTS
In February 2024, NABU and SAPO, in cooperation with the SSU, uncovered a scheme, involving a member of the state's highest echelons. The case concerns the seizure of confiscated oil products by a criminal organization between 2014 and 2018, resulting in damages to the state of nearly one billion hryvnias.
In 2014, the court seized oil products imported to Ukraine in violation of the law. The then acting Head of the Presidential Administration of Ukraine, together with an entrepreneur in the oil business, concocted a scheme to misappropriate the seized property and formed a criminal organization for that purpose. They managed to transfer the crude to a state enterprise run by controlled persons. This state enterprise sold the oil at reduced prices to a company controlled by the co-organizer of the scheme under the pretext of forced sale. The proceeds were transferred to the accounts of other controlled entities, while the state budget did not receive a single hryvnia. This resulted in losses to the state worth UAH 967 million. The participants of the scheme - the former acting Head of the Presidential Administration of Ukraine, an entrepreneur, and top managers of the state enterprise - were notified of suspicion. The investigation is ongoing.
ATTEMPTED BRIBERY OF NABU AND SAPO
In early summer, NABU and SAPO uncovered a new attempt to bribe detectives and prosecutors.
A lawyer from one of the capital's law firms offered an undue advantage of USD 200,000 to officials of anti-corruption agencies for transferring his client's case concerning the misappropriation of electricity from NPC Ukrenergo worth UAH 716 million to another pre-trial investigation body. The investigation is ongoing
DRAFT-AGE MEN ILLEGAL BORDER-CROSSING SCHEME
After russia’s full-scale invasion, a scheme emerged in one of the district courts in the Odesa region, allowing draft-age men to leave Ukraine and avoid mobilization. It involved issuing court decisions to establish the residence of a minor with his father, enabling the adult to use it as a pretext to travel abroad with the child. Prospective 'clients' were sought in social media groups, and the cost of each court decision ranged from USD 1,500 to 3,500. During 2022-2023, more than 1,000 such decisions were issued for men from all regions across the country. Meanwhile, there were cases of men traveling abroad without their children, determining the child's place of residence in temporarily occupied territories, falsifying procedural documents by plaintiffs, and interfering with the automated court case distribution system. Detectives managed to document the transfer of USD 1,500 to one of the judges in exchange for a 'rescue' decision. The judge was notified of suspicion under Part 3 Article 368 of the Criminal Code of Ukraine.
