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$533 Mln Misspent on Russia Defense Deals - Watchdog

RIA Novosti

13:22 15/03/2013 MOSCOW, March 15 (RIA Novosti) - About 1,500 violations and infractions have been uncovered in Russia's state defense spending in 2012 involving over 16 billion rubles ($533 million), the Russian Federal Defense Contracts Service (Rosoboronzakaz) said on Friday.

The service conducted 99 scheduled and 176 surprise checks and audits, finding 1,415 instances of the unlawful receipt and use of state funds, Rosoboronzakaz said in a report posted on its website.

Over 2 billion rubles was returned to the budget and over 3.5 billion rubles worth of damage was averted last year, the service said, adding that 572 administrative fines were imposed totaling 15.59 million rubles.

The amount of misused funds returned to the budget has doubled in the past three years, Rosoboronzakaz said.

The Chief Military Prosecutor’s Office said on Thursday an investigation was underway into the suspected embezzlement of 7 million rubles at a Defense Ministry owned health resort in south Russia’s Stavropol region. A number of top managers at the Slavyanka sanitarium, including its director Magomed Magomedov, are suspected of appropriating Defense Ministry’s funds by paying third parties for services which were not provided.

That is the latest in a string of scandals at the Defense Ministry recently involving suspected fraud. Several people employed by the Oboronservis defense property services company were arrested late last year on suspicion of fraud totaling over 13 billion rubles ($430 mln) involving the illegal sale of ministry property.

Former Defense Minister Anatoly Serdyukov resigned over that scandal in November.

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