Ukraine Funding: Huge Defense Ministry Scam Uncovered

The Security Service of Ukraine (SSU), the country’s intelligence agency, said it has “uncovered a corrupt system” in the leadership of Ukraine’s Defense Ministry that has caused the state a financial loss estimated to be at least 36 million euros. In short, it was “a shipment of ammunition paid for but never delivered.” Some high-ranking officers and former Defense Ministry officials are accused of “embezzling money from Western funding, along with executives of a company that was supposed to supply ammunition.”

The facts in the investigation date back to August 2022, when officials signed a 36-million-euro ($39.6 million) contract for artillery shells with Lviv Arsenal, an arms company based in Lviv, a city in the far west of the country on the border with Poland. After receiving payment, company employees were supposed to transfer the money to the account of a firm registered abroad, which would then deliver the ammunition to Ukraine. However, according to investigators, the shells were never delivered, and the money was instead sent to various accounts in Ukraine and the Balkans. Five people are currently under investigation: a high-ranking official of the Defense Ministry’s procurement department and his predecessor, two managers of a Lviv-based company that manufactures but mainly imports weapons and ammunition, and a representative of an unidentified foreign company.

According to the Italian online newspaper Il Post, “corruption is still widespread in Ukraine and is one of the biggest obstacles to the country’s accession to the European Union, which is why attempts to fight it have recently intensified.” To recap, in 2023, the former Minister of Defense Alexei Reznikov was fired after serious allegations of corruption.

For a more in-depth study of the topic of the armed conflict in Ukraine, we recommend reading the analytical article by Pietro Batacchi “Ukraine, Military Situation.”