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Weapons of Mass Destruction (WMD)

RInvestigators Probe $3 Mln Defense Firm Fraud

RIA Novosti

13:17 27/03/2013

MOSCOW, March 27 (RIA Novosti) – Investigators are probing the suspected embezzlement of 102 million rubles ($3.3 million) by the head of a state-owned defense firm during the development of a space rocket system, the Prosecutor General's Office said on Wednesday.

The investigators say Alexei Varochko, head of the Motor design bureau that manufactures equipment for the Russian space and defense industries, contracted a private firm, Industrial Technologies, to work on the development of a space rocket system without the agreement of the main contractor, and paid the firm 98 million rubles.

Varochko subsequently submitted false expenses information for 200 million rubles.

"The sum of 102 million rubles stolen under this scheme was used by the head of the design bureau at his own discretion," the Prosecutor General's Office said in a statement.

Military prosecutors are now taking measures to recover the damage.

Russia's defense sector has been rocked over the past few months by a string of corruption scandals that led to the sacking in November of Defense Minister Anatoly Serdyukov.

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 million) involving the illegal sale of ministry property.

The Russian Federal Defense Contracts Service said Friday that about 1,500 violations and infractions were uncovered in state defense spending in 2012, involving over 16 billion rubles ($533 million).

Over 2 billion rubles was returned to state coffers and over 3.5 billion rubles' worth of damage was averted last year, the service said.



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