Ukraine Officials Implicated In $40 Million Mortar Embezzlement Scheme

In the latest reinforcement of the country’s reputation for rampant corruption, Ukraine’s SBU intelligence agency says it has uncovered a $40 million embezzlement scheme in which a defense firm agreed to supply the country’s army with 100,000 mortar rounds — but never delivered even one.  

No names have been named yet. However, the shadow of guilt extends beyond officials at the firm, Lviv Arsenal, to include current and former senior Ukraine Defense Ministry officials, the SBU said in a statement on Saturday.  Five individuals have been formally charged so far, and The Guardian reports that two are from the defense ministry. At least one was said to be caught trying to flee Ukraine; all face up to 12 years in prison. 

The Defense Ministry has been cooperative, according to the SBU. In September, Ukraine President Volodymyr Zelensky fired defense minister Oleksii Reznikov. At the time, his ouster was linked to various financial improprieties that that had emerged in his ministry — though Reznikov himself wasn’t directly implicated. Of course, his firing also came after Ukraine’s highly-touted 2023 counteroffensive essentially accomplished nothing — other than pointlessly killing and maiming Ukraine soldiers. 

The mortar-shell scheme goes back to a contract signed in August 2022. That was just six months after Russia invaded in February of that year. “However, [Lviv Arsenal] never sent a single round to our country, while moving the money into the shadows,” the SBU said in its statement. The shadowy destinations reportedly included a Balkan bank account. 

At a time when American citizens and GOP legislators are growing increasingly reluctant to continue funding the proxy war in Ukraine, this latest news cuts two ways. It highlights the fact that American money has been wasted in the war, but also demonstrates some Ukrainian resolve to clamp down on bureaucrats in and out of government skimming money and weapons off the top.  

The $40 million mortar scam is certainly just the tip of the iceberg. Earlier this month, the Department of Defense inspector-general issued a report concluding that the Pentagon had failed to properly track approximately $1 billion of weapons transferred to Ukraine.  

“While the DoD (Department of Defense) has improved execution of EEUM (enhanced end use monitoring) since the full‑scale invasion began in February 2022, the DoD did not fully comply with the EEUM program requirements for defense article accountability in a hostile environment,” wrote the IG.