The Ukrainian defense sector has once again found itself at the center of a high-profile corruption scandal. The Security Service of Ukraine is investigating criminal proceedings against officials of the Zaporizhzhia state joint-stock company Ivchenko-Progress and a number of private companies suspected of conspiring to embezzle state funds through fictitious procurement schemes.
According to the investigation, during 2021–2023, the management of Ivchenko-Progress, which is part of the Ukrainian Defense Industry JSC, transferred more than 120 million hryvnias to the accounts of two companies - LLC PP Carbon and LLC UPK Carbon. Both companies had no production facilities, personnel, or warehouses, and their income depended almost entirely on contracts with the state-owned enterprise.
In fact, these structures acted as intermediaries, reselling goods at inflated prices. Among the items in the purchases were 3D carbon composite plates, cathodes, furnaces, etc. However, an analysis of the market value revealed that the amounts in the documents were significantly overstated.
To avoid open tenders, state-owned enterprise officials created conditions under which only PP Carbon and UPK Carbon could supply equipment. Certificates of quality and origin of goods were issued on behalf of foreign companies that were not actually involved in the supply.
The investigation established that the companies actually existed only on paper. Some of the state funds remained in their accounts, while the rest was transferred to the accounts of other companies, among which Bridge Construction LLC attracted special attention from law enforcement agencies.
This company, which was formally engaged in construction, actively participated in tenders in Dnipro, Boyarka, and Vyshneve. It won about 50 procurements, but the investigation revealed that the work was performed by third-party firms, and most of the funds were transferred through chains of shell companies and withdrawn in cash.
Among the contractors to whom millions of hryvnias were transferred were:
– Klion LLC – 66 million UAH
– Molochny Kray 2019 LLC – 51 million UAH
– Aquaplast LLC – 36.2 million UAH
– Dniprobud Invest LLC – 20.4 million UAH
Instead of real construction, the funds were used for laundering through fictitious transactions: the purpose of the payments was changed from payment for goods to financial assistance or dividends.
The Financial Monitoring Service and the Tax Service have confirmed numerous signs of money laundering. As of now, the accounts of Bridge Construction LLC in several banks, including EPB JSC, KB Globus JSC, and Sense Bank JSC, have been blocked.
It is also noted that the company recently changed owners - instead of Dnipro resident Dmytro Pasyura, the head was replaced by Kazakh citizen Oleksiy Kamalov. This may indicate an attempt to remove the company from the jurisdiction of Ukrainian law enforcement agencies.
The case is being investigated under Part 3 of Article 258-5 (financing of terrorism) and Part 3 of Article 209 (money laundering) of the Criminal Code of Ukraine.
