29.11.2024 Money laundering Tenders

How the Defense Procurement Agency under Bezrukova’s leadership makes money on drones and pickups for the Armed Forces

Скандал в Агенції оборонних закупівель: керівниця держпідприємства відреагувала на присутність ексрегіонала у команді - Главком

Purchases of drones, clothing, and food for the needs of the Armed Forces of Ukraine have become a real source of enrichment for all levels of the Ministry of Defense. During the great war, officials have managed to line their own pockets with billions of hryvnias, not millions, at the expense of the health, safety, and ultimately the lives of soldiers defending the country at the front.

So who is robbing the Armed Forces and to what extent? We propose to analyze the activities of the Defense Procurement Agency, a state-owned enterprise controlled by the Ministry of Defense that purchases drones and vehicles for military units.

Drones at inflated prices

Drones are one of the most urgent needs of Ukrainian defenders on the battlefield. And instead of purchasing them at loyal prices in maximum volumes, officials of the Defense Procurement Agency under the leadership of Maryna Bezrukova lobby for the interests of controlled legal entities and further inflate the cost per unit, receiving hundreds of thousands of dollars from just one tender.

Thus, the favorites of the PJSC in the procurement of drones are YASNO 2022 LLC and NEBO V PIXEL LLC.

Interestingly, until 2024, YASNO 2022 LLC was engaged in grain trading, but unexpectedly switched to the production of aircraft. At the same time, Nebo v Piksel LLC is a company associated with Maksym Makarenko, a Kyiv City Council deputy from the UDAR party, who, using his connections in the military, lobbied for the company’s victory in tenders.

Companies with dubious experience and qualifications enter into contracts with inflated prices for drones, and part of the money ends up in the pockets of the “right” people. For example, recently, the healthcare organization purchased a DJI Mavic 3 Enterprise for a total of UAH 107,513. When analyzing the estimate, it became clear that the overpayment for one drone was UAH 10,000-12,000.

A total of 700 drones were purchased, costing the state budget at least UAH 7 million more than the actual cost.

In order to keep the kickback system hidden, the Defense Agency conceals information about the prices of the deals and the winners.

We applied to the list of law enforcement agencies, and as a result, the State Bureau of Investigation in Kyiv initiated an investigation in the proceedings Nº 62024100110000163 on the grounds of a criminal offense under part. 5 of Art. 191 of the Criminal Code of Ukraine. I wonder if law enforcement will follow through and investigate the case properly.

“War birds” and corruption schemes

The DPO actively promotes the interests of a number of other legal entities, including: “FIGHTING BIRDS OF UKRAINE” LLC, ‘MODULE 5’ LLC, ‘FLASH TECH’ LLC, ‘VNA TRADE’ LLC.

As a result, SBI investigators even opened a criminal case No. 62024100110000061 against the listed drone suppliers. The investigation revealed the absence of licenses for international trade in drones, possible facts of tax, VAT and customs evasion, overstatement of the cost of products by almost three times and withdrawal of foreign currency abroad.

For example, one of the legal entities, Flash Tech LLC, was established only in July 2023 and has already begun rapidly supplying drones to the Kyiv Regional State Administration, the Dnipro Municipal Energy Service Company, and others.

Before the war, VNA TRADE LLC generally specialized in the sale of chemicals, perfumes, and cosmetics. So, I wonder if the company really has the necessary capacity?

Purchase of pickup trucks for the Armed Forces of Ukraine

1.34 million hryvnias for one pickup truck – this is the estimate published by the Healthcare Agency in the public procurement system. This is about 35 thousand dollars per pickup, which is significantly higher than the market value.

For comparison, an MG T60 pickup truck that meets the tender requirements costs only UAH 842,065. The purchase of 154 such vehicles would have cost UAH 129.6 million. This is UAH 77 million less than the expected cost of the tender by the Healthcare Organization. But why does the healthcare organization choose more expensive options?

Among other things, there are top sellers who won the tender procurement announced by the SE “Healthcare Company”:

  1. The name of the seller is withheld, an agreement was concluded with him for a total amount of UAH 544,578,320.
  2. Joka Travel Ukraine LLC concluded agreements for a total amount of UAH 29,066,666.
  3. Research and Production Enterprise “INFORMATION TECHNOLOGIES” LLC – UAH 10,481,836.
  4. Ulis Systems LLC – UAH 3,226,812.
  5. Strabis Web LLC – UAH 847,000.

Our materials on the procurement of pickup trucks at an inflated price were registered in the URPTI at 72024102100000022, and in the Kyiv City Police Department under Part 2 of Article 364 of the Criminal Code of Ukraine.

Corruption in defense procurement in the midst of war is not only a loss of budget funds, but also a threat to the lives of the military, who are left without basic necessities.

We call on law enforcement agencies to investigate price gouging in the above tenders involving the above-mentioned legal entities, to establish who the ultimate beneficiaries of such schemes are, and to ensure transparency in defense procurement.

These schemes are not just about money. They are about undermining trust in the government, risking the lives of our defenders, and the loss of territory and weakening our defense capabilities.

We would like to address the Minister of Defense, Prime Minister, General Syrsky! This corruption is your responsibility. Are you really ready to risk the lives of our soldiers and the future of Ukraine for the sake of the interests of individuals? The public is already aware of this, and ignoring these crimes can only mean one thing – you are also in on it.

Did you witness a crime?

Let us know about it. We will help protect the violated rights!

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