In Odessa, a scheme for embezzling funds that were supposed to go to meet the needs of the Armed Forces of Ukraine was exposed. According to the investigation, city council officials, together with controlled entrepreneurs, artificially inflated the cost of contracts, illegally including VAT where it should not have been charged. Thus, they withdrew more than 1.6 million UAH from the budget. This was reported by the Prosecutor General's Office and the National Police on October 31, 2025.
According to the investigation, the organizers of the scheme were the former director of the Municipal Security Department of the Odessa City Council and his first deputy. They acted in collusion with the heads of private companies with whom they concluded contracts for the supply of goods for military units. In particular, the purchase involved 300 radios with additional batteries.
The scheme worked like this: the amount of value-added tax was artificially added to the price of contracts. But the supply of products to the Armed Forces of Ukraine under martial law is exempt from VAT by law. That is, the tax should not have actually been charged and should not have been paid, but the defendants included it in the cost of contracts, effectively “inflating” budget expenses. This difference was appropriated. The amount of losses is 1,661,510 hryvnias.
On October 31, law enforcement officers simultaneously conducted 12 searches — in Odessa, the Odessa region, and the Kyiv region. Investigators went to the suspects’ residences, to the offices of private structures, and to the municipal security department of the city council itself. During the searches, financial documentation, contracts, draft records, and digital media were seized, which, according to the prosecutor’s office, confirm the illegal mechanism.
Four defendants have already been notified of suspicion. Among the suspects are former officials of the Odessa City Council and heads of commercial structures. They are charged with embezzlement and embezzlement of property on a particularly large scale, committed by prior conspiracy of a group of persons using their official position (Part 5 of Article 191 of the Criminal Code of Ukraine). This article provides for up to 12 years of imprisonment with confiscation of property and a ban on holding certain positions.
The issue of preventive measures is currently being resolved. According to the investigation, the requests concern detention.
The case is being classified as embezzlement of funds from the Odessa community allocated for military needs. Law enforcement officers directly link the stolen money to defense: it is not about conditional improvements or repairs, but about the supply of equipment for units working at the front.
This is not the first corruption episode recorded in the structures of the Odessa city government. Throughout October, law enforcement agencies reported other criminal proceedings against officials and contractors related to improper purchases and embezzlement of city funds - from construction contracts to the use of humanitarian generators for private purposes. A number of cases involve former heads of the municipal security department.
