A large-scale corruption scheme in the field of defense procurement has been exposed in Ukraine, involving high-ranking officials of the Ministry of Defense and representatives of private business. The defendants in the case are the acting director of the Ministry of Defense Procurement Department, Colonel Oleksandr Osadchy, director of the Ministry of Defense Legal Support Department, Oleksiy Kaminetsky, and the owner of PrJSC “NPO “Praktyka” Oleg Vysotsky.
The mechanism was built so that public funds intended for the needs of the army would bring profit to private individuals.
On March 30, 2022, PrJSC "NVO "Praktika" received an advance payment of UAH 124.1 million under a defense contract signed just two days before. On the same day, the company placed over UAH 113 million on deposit with Ukreximbank, earning over UAH 3 million in passive income.
In fact, the budget money allocated for the purchase of equipment was used as a financial instrument for generating profit unrelated to the fulfillment of the state order.
Despite the obvious signs of illicit enrichment, the Ministry of Defense did not initiate any lawsuits or claims against the supplier. Moreover, in April 2023, an additional agreement was concluded, which reduced the price of the equipment unit by the amount earned from the deposit. This created the appearance of “balancing”, but in fact legalized the illicit profit and hid the initial overestimation of the contract value.
Praktika continued to win government tenders. The technical requirements of the tenders were often written in such a way as to eliminate competitors and give an advantage to a particular supplier. This allowed the company to set inflated prices.
The money obtained as a result of these schemes was legalized through a wide network of accounts in dozens of banks. The funds were transferred to fictitious enterprises, converted into cash and taken abroad. According to sources, the management of banking institutions deliberately “turned a blind eye” to transactions with obvious signs of laundering.
