A scheme involving the diversion of over 576 million hryvnias from the defense sector into the "shadow economy" has been liquidated in Ukraine, Prosecutor General Ruslan Kravchenko reported on social media on Monday, UNN reports.
Over 576 million hryvnias from defense diverted into the "shadows." The scheme has been liquidated. The activities of a criminal organization that created a so-called "conversion center" to assist enterprises in money laundering and tax evasion have been exposed and terminated. One of their "clients" was an enterprise that, throughout 2023-2025, fulfilled contracts for the repair of military equipment for the Ministry of Defense and the National Guard,
Details
According to the Prosecutor General, "out of 2.5 billion UAH received from the state, company officials and the 'conversion center' dealers diverted over 576 million UAH into the 'shadows'."
"We are talking about state funds that were supposed to work for defense. Instead, they were funneled through shell companies and converted into cash," Kravchenko noted.
As the Prosecutor General reported, the organizers of the "conversion center"
"created and controlled shell companies to which officials of the enterprise executing defense contracts transferred funds for non-existent goods and services." "The fictitious suppliers existed only on paper – without personnel, without production, with straw-man directors from the temporarily occupied territories and fabricated foreign beneficiaries," he said.
"Through a network of transit firms, the funds were 'laundered' and returned to the clients in cash for their illegal enrichment, while the 'conversion center' company received a percentage for its 'services.' In parallel, artificial losses were created for the enterprise to avoid paying taxes. According to expert findings, the amount exceeds 100 million UAH," the Prosecutor General continued.
Over 40 searches were conducted. Cash, vehicles, equipment, seals, and "shadow" accounting records were seized. Seven individuals have been served with notices of suspicion. They are being held in custody without the right to bail,
The investigation is ongoing. The full circle of persons involved in the crime is being established to bring them to justice.
"Over half a billion hryvnias from defense contracts were diverted into the 'shadows.' This is not a clerical error or a commercial dispute – it is an organized scheme. And those responsible will be held accountable. We continue our work," Kravchenko emphasized.