Ukraine's SBU security service and the Defense Ministry said Friday they had uncovered a scheme for fraudulent purchase of artillery shells that involved embezzlement of the equivalent of nearly $40 million.
Corruption in Ukraine, more than 30 years after the end of Soviet rule, has become an even more crucial issue as Kyiv proceeds with its application to join the European Union.
Incidents of corruption in the military, including in procurement, have sparked several prominent scandals.
A contract to secure the artillery shells at higher-than-market prices had been abandoned by the defense ministry's recently created procurement agency and a new deal struck that eliminated intermediaries and significantly reduced the price.
But a senior ministry official, the procurement agency said, extended the previous contract and funds totaling nearly 1.5 billion hryvnias ($40 million) were deposited in accounts belonging to the intermediary firms.
The unnamed official, the main suspect in the case, was removed from his duties, legal proceedings have been launched against him and attempts are underway to recover the money.
A Defense Ministry statement said that the scheme was uncovered last week and that an audit confirmed the illegal activity. Searches were conducted within the ministry and at other premises.
