Defense millions disappeared into the "shadows": over UAH 576 million stolen under the guise of equipment repairs

Law enforcement announced the dismantling of a large-scale criminal scheme through which more than UAH 576 million were siphoned off from defense contracts. It concerns the so-called “conversion center” that serviced companies, helping them legalize funds and evade taxes. Among the “clients” is a company that in 2023–2025 carried out repairs of military equipment for the Ministry of Defense and the National Guard. In total it received about UAH 2.5 billion from the state, a significant portion of which was moved into the “shadow” economy.

“More than half a billion hryvnias from defense contracts were pushed into the ‘shadow’ economy. This is not an error in the documents and not a commercial dispute — this is an organized scheme. And those responsible will be held accountable.”

According to the investigation, the organizers created a network of fictitious companies through which they cycled the money. These “suppliers” existed only on paper: without employees, production, or real activity. Often managers were registered as people from temporarily occupied territories, while beneficiaries were fabricated as foreigners.

Funds were transferred for non-existent goods and services, after which they were “laundered” through transit firms and returned in cash. For this, the “conversion center” received its cut. At the same time, the enterprise was artificially saddled with losses to minimize taxes — according to experts’ conclusions, the state lost more than UAH 100 million.

During the investigation, more than 40 searches were conducted. Law enforcement seized cash, vehicles, computer equipment, stamps, and the so‑called “black ledger.”

Currently 7 individuals have been charged. All of them are held in custody without the right to bail. The investigation is ongoing — law enforcement is identifying all those involved in this scheme.

Earlier we wrote:

• From the front — for sale: in Ukraine a scheme was uncovered stealing hundreds of drones for the army worth tens of millions
• 7 million “for the lights”: in Mykolaiv, for embezzling the budget they were given only one year of probation
• “Classified” UAH 654 million for heating networks: Mykolaiv OVA signed contracts with figures involved in corruption scandals
• They were supposed to light up Mykolaiv, but they “darkened” the budget: the entrepreneur was ordered to pay bail of half a million
• UAH 64 million stolen during the war: the SBU and DBR uncovered a scheme in the transport service for the army