Employees from a Ukrainian arms firm conspired with defense ministry officials to embezzle almost $40 million earmarked to buy 100,000 mortar shells for the war with Russia, Ukraine's security service reported.
The investigation comes as Kyiv attempts to clamp down on corruption in a bid to speed up its membership in the European Union and NATO. Officials from both blocs have demanded widespread anti-graft reforms before Kyiv can join them.
Ukrainian President Volodymyr Zelenskyy was elected on an anti-corruption platform in 2019, long before Russia's full-scale invasion of Ukraine in February 2022.
Security officials say that the current investigation dates back to August 2022, when officials signed a contract for artillery shells worth 1.5 billion hryvnias with arms firm Lviv Arsenal.
Company employees were supposed to transfer the funds to a business registered abroad, which would then deliver the ammunition to Ukraine.
The goods were never delivered and the money was instead sent to various accounts in Ukraine and the Balkans, investigators said.
Ukraine's prosecutor general says that the funds have since been seized and will be returned to the country's defense budget.
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