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Weapons of Mass Destruction (WMD)

Russian Police Probe $17 Mln Missile Forces Fraud

RIA Novosti

15:44 24/01/2013

MOSCOW, January 24 (RIA Novosti) – Police have uncovered the embezzlement of hundreds of millions of rubles of state funds from Russia's Strategic Missile Forces (RVSN), the Interior Ministry said on Thursday.

High-level Defense Ministry officials and commercial executives are suspected of involvement in the fraud, the Interior Ministry said.

In 2008 the Defense Ministry allocated 500 million rubles (about $17 million) for modernization and upgrade of RVSN launch facilities.

The head of an RVSN department signed a 10-million ruble contract with the PromSpetsStroi (PSS) company for the modernization of 11 such facilities located in Siberia's Orenburg region.

The contractor only partially fulfiled the contract and failed to meet required quality standards, but received full payment from the Defense Ministry and the RVSN department in question.

Investigators also found that a PSS director received a 1.5-million-ruble kickback from a subcontractor.

A criminal case has been opened on charges of graft, fraud and abuse of office.

The case is part of a wider probe into alleged fraud involving state assets worth at least $130 million at defense property management firm Oboronservis. The investigation, involving at least a dozen separate instances of fraud, led to the sacking of Defense Minister Anatoly Serdyukov in November.

Three other people were arrested last year over the case, including the former head of the Defense Ministry's property department Yevgenia Vasilyeva, and former Oboronservis executives Yekaterina Smetanova and her husband Maxim Zakutailo.

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