The Security Service of Ukraine (SBU), with the assistance of the Defense Ministry of Ukraine, exposed the embezzlement of UAH 1.5 billion, which had been allocated for the procurement of ammunition, by officials of the ministry and managers of Lviv Arsenal, the press service of the SBU said on January 27.

"According to the investigation, former and incumbent senior officials of the Defense Ministry of Ukraine as well as top managers of affiliated companies were involved in the scheme. The perpetrators made an attempt to steal almost UAH 1.5 billion of budget funds during the procurement of 100,000 mortar rounds for the Armed Forces of Ukraine," it said on the Telegram channel.

In August 2022, the officials concluded a contract with Lviv Arsenal for the procurement of a wholesale batch of artillery shells.

Then the Defense Ministry transferred the full contracted amount to the enterprise's accounts.

Having received the funds, the company management transferred part of the money to a foreign commercial structure which was supposed to supply the ordered ammunition to Ukraine.

"However, not a single artillery shell was sent by the latter to our state, while the received funds were hidden on the shadow accounts of another affiliated structure in the Balkans. The rest of the amount received from the Defense Ministry remained on the accounts of the Ukrainian company in one of the capital-based banks," the SBU said.

The SBU has documented the embezzlement scheme and identified all persons involved in it. The stolen funds were seized and the issue of returning them to the budget of Ukraine is being resolved.

Five defendants in the case were notified of suspicion under Part 5 of Article 191 of the Criminal Code of Ukraine (appropriation, embezzlement of property or appropriation via abuse of office committed by an organized group).

"In particular, suspicion was reported to the former and incumbent heads of the Defense Ministry's Department for Military and Technical Policy, Arms and Military Equipment Development, the head and Chief Commercial Officer of Lviv Arsenal as well as their accomplices – representatives of the foreign commercial structure," the SBU said.

One of the defendants was detained when trying to flee Ukraine. The measures of restraint are being selected for the other defendants.

The perpetrators are facing up to twelve years in prison with the confiscation of property.

The comprehensive operations were conducted jointly with the National Police, under the procedural guidance of the Prosecutor General's Office of Ukraine.