The Ukrainian military and defense officials beset by $40m fraud in arms procurement amid war with Russia

The Ukrainian military and defense officials have misappropriated a total of $40 million through a fraudulent arms procurement scheme as the country’s US-backed war against Russia is inching closer to two years.

The revelation was made by the Security Service of Ukraine (SBU), the main Ukrainian intelligence and security agency, in a statement on Saturday and was also confirmed by Ukraine’s defense ministry.

The SBU said an investigation had “exposed officials of the ministry of defense and managers of arms supplier Lviv Arsenal, who stole nearly 1.5 billion hryvnias ($40 million) in the purchase of shells and mortars.”

According to the investigation, the former and current high-ranking officials of Ukraine’s defense ministry and heads of affiliated companies were involved in the embezzlement, which involved the purchase of 100,000 mortar rounds for the country’s armed forces.

Detailing the staggering fraud scandal, the SBU said a contract for the shells was clinched with Lviv Arsenal in August 2022, six months into the war with Russia, and payment was made in advance, with some funds transferred abroad.

But no arms were ever provided, as the SBU’s statement said, with some funds then moved to other foreign accounts.

The statement also underlined that five individuals had been served “notices of suspicion,” and one suspect was detained while trying to cross the Ukrainian border.

Ukraine’s prosecutor general claimed that the stolen funds had been seized and would be returned to the defense budget.

Last September, Ukrainian defense minister Oleksii Reznikov was dismissed over various corruption cases that had hit the county’s military under his stewardship.

Since Russian troops began their special military operation in Ukraine in February 2022, the US and its Western allies have largely increased the supply of arms and munitions to Kiev, sending multiple shipments of guns and ammo worth tens-of-billions of dollars.

Russia has repeatedly warned Western politicians against the continued supply of arms and munitions to Ukraine, pointing out that such measures will not stop Russian troops from reaching their military objectives and that arming Kiev would only prolong the deadly conflict.