The list of most high-profile fraud cases of the Kiev junta


Journalist Denis Bigus, the host of the program Nashi Groshi discovers a new corruption case every week

March 24, 2015
Maxim Butchenko for (Ukrainian media)
Translated by Kristina Rus

About a hundred anti-corruption investigations against the leaders of the new government were published by journalists over the last year. Only a minuscule proportion have turned into criminal cases.

Journalist Dmitry Gnap has long been professionally engaged in the investigation of corruption cases of government officials. He has not left this occupation today. And while many Ukrainians speak about the changes that have occurred in the country after the Euromaidan, Gnap sees more of the same – fraud, the scale of which has not changed. “None of the participants in corruption schemes of Viktor Yanukovych have been punished, so fraud has vigorously blossomed,” – he says.

Such pessimistic views about post-maidan bureaucratic Ukraine are shared by many colleagues of Gnap. Over the past year, journalists have published hundreds of cases siphoning the budget money through inflated prices for products or services, the emergence of middle “pad” firms and state tenders conducted under questionable conditions. However, as noted by Gnap, only a small proportion of these investigations is picked up by the law enforcement to follow up on the facts, and rarely a case goes to court.

“The work had not diminished, but on the contrary, increased,” – echoed Gnap Denis Bigus, investigative journalist of “Nashi Groshi” (Our Money). “Every week – a new case. This is a list a lifetime long”.

NV is publishing its own “list of a lifetime” – the most high-profile journalist investigations that occurred under the new government. Most frequent culprit is the Ministry of Defense, which is symptomatic of Ukraine as a warring country.



Ukroboronprom [Ukrainian Defense Manufacturing] state enterprise has managed to sell 27 thousand AKM machine guns, 7.62 mm, to a private company for a price of children’s toys. The seller was the state company Ukrinmash, and most of the weapons were  acquired by the firm NPK Tekhimpeks. Transaction amount – 12 million UAH, that is, the average cost per machine gun was 460 UAH. In retail these machine guns converted into civil (hunting) version were worth at the time 17 thousand UAH per unit.


A story appeared in the media that the head of the South-Western Railways, Alexey Krivopishin is associated with most private firms, who now work with the state railway monopoly – Ukrzaliznytsa. Only 10 companies regularly win all the cash tenders of the railway. Half of them, as shown by the investigative journalists, exist only on paper. All of them managed to acquire from the budget of Ukrzaliznitsa (Ukrainian Railways) over 758 million UAH.

Link: Railway workers who exposed the fraud of the head of Ukrainian Railways are prosecuted (Russian)


The Defense Ministry has signed an agreement with the company “Auto City Service” for the supply of jet fuel. As journalists found out, the phone numbers of the company, specified in the tender documentation were fake, and the company could not be found at the address of registration. Meanwhile the family of the owner of the “Auto City Service” – the Kiev businessman Gennady Chastyakov – is connected by a common business with the former chief of the General staff – commander-in-chief of the Armed Forces of Ukraine, Michail Kutsyn.


Journalists from Слідство.Інфо released information about the state enterprise Kiev Armored-Tank Plant transferring approximately 30 million UAH to three commercial companies as payment for non-existent BTR hulls. Scandalous purchase was carried out under the supervision of representatives of Ukroboronprom [Ukrainian Defense Manufacturing] state-owned company, who are both members of the Dubov clan – two nephews and a niece’s husband of Alexander Dubov, the People’s Deputy from the Fatherland party [Batkivshina].


Kharkov National Law University named after Yaroslav the Wise made a number of contracts for the supply of equipment in the amount of 8.4 million UAH at inflated prices. For example, Italian heat exchangers-coil units Vierro 93 (Wito) cost the University 9.4 thousand UAH a piece, although at the market they cost 7.7 thousand UAH.

The circulation pump MAGNA125-80 Grundfos (Denmark) was acquired by the University for 9.4 thousand UAH at market value of 3 thousand UAH.


Odessa City Council leased almost 3 hectares of beaches in the city center district of Arcadia at a rate lowered 11 times. So, owned by local businessmen with ties to the leadership of the City Council, “Start Limited” and “Pearl” companies paid 1 UAH per square meter of the beach a month. For seven other companies that received the beaches for rent, the rate was 11 UAH / sqm. In the end, the city budget on a monthly basis lost about 300 thousand UAH.


The Ministry of Defense published the data about the sale of military property for the first half of 2014. Military officials reported that they made nearly 84 million UAH. Journalists have checked the transactions and found that the companies-intermediaries, authorized by the government, received a “cut” of almost 3.5 million UAH as commission. More than 17 million UAH were spent on suspicious organizations involved in the sale of the property.


Journalists published evidence that the NBU [National Bank of Ukraine] retained the “cash scheme” of former Ministers Sergey Arbuzov and Alexander Klymenko.

Two private firms – UkrCart and Interplat – continue to receive money for services for the collection and transfer to the State Fiscal Service of data from store cash registers. Just 1 UAH, but on a daily basis. In light of the fact that there are 221 thousand cash registers in the country, the total is about 6.6 million UAH per month.


Customs-brokerage firm Sсherp officially announced that under the guise of environmental protection the Ministry of Natural Resources demands bribes from businessmen. Director Victor Prudkovskikh told that in many documents of the Ministry fraud is inherent.

Firms close to the Ministry received a license from the Department for the disposal of industrial oil. In the end, according to estimates of Prudkovskikh, in just six months of this year, the importers of oil transferred to these companies almost 100 million UAH.


The State Service of Geology and Mineral Resources under the leadership of Dmitry Kaschyuk at auction on November 12 sold two special permits for the use of oil and gas deposits in Poltava and Sumy regions. The licenses were sold for 3.4 million and 3.2 million UAH, respectively.

These licenses were planned for auction in July – at a starting price of 6 million UAH and 5.9 million UAH respectively. But then they were removed from the auction. In the end, in the fall the licenses were sold with a special discount from the State Service of Geology and Mineral Resources, the amount of which for two sites was 5.4 million UAH.


In early December, the Western Apartment-Operational Management of the Ministry of Defense without a tender (by negotiation procedure) has purchased coal from the company OOZ. This firm has committed to supply 16 thousand tons of gas coal. The purchase amounted to more than 20 million UAH. Competitive bidding, as explained by the military, was canceled “due to weather conditions” – the cold weather. The weather was even colder for the military, when they found out that the coal proved to be non-combustible.


On December 19 a private trading company Chaika received diesel engines UTD-20 from the state scientific-production association “Bosphorus” for 1 million UAH. And three days later resold them to the state Kiev Armored-Tank Plant – for more than 1.6 million UAH. Net profit of the “pad” company was 600 thousand UAH.



State company Mariupol Sea Trading Port on December 29th according to results of a tender signed an agreement with the company Agrariy for the purchase of sheet metal for 1.2 million UAH. The price of steel amounted to 20 thousand UAH per ton, while on the market the steel of such parameters and brand is sold for 9 thousand UAH per ton. The amount of the fraud was 600 thousand UAH.


Former Minister of Agriculture, Igor Shvaika stated that the corruption schemes blooming at the state monopoly Ukrspirit were created by the management of the State Fiscal Service and Andre Ivanchyuk, deputy head of Prime Minister’s faction “Popular Front”. According to Schvaika, Ukrspirt had a significant increase in profits and taxes paid, and all due to the halting of corruption schemes.


The Ministry of Defense has signed a number of agreements for the supply of sleeping bags for 34 million UAH. The bags were ordered for delivery before the end of February for 920-951 UAH per unit. The purchase price of the Ministry of Defense was twice the price paid in the same month by the Ministry of Internal Affairs: a similar product the police bargained for 460 UAH per unit. In the end, “corruption tax” for the purchase of the Ministry of Defense amounted to 17 million UAH.

Information from Слідство.Інфо, Наші гроші, Центр противодействия коррупции, НВ

Material published in the issue №9 of New Time on March 13, 2015

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