Defence Ministry procurement fraud: court returns nearly US$1 million seized from former deputy minister

A Ukrainian court has returned almost a million dollars that had been seized from former Deputy Defence Minister Oleksandr Myroniuk, who had been involved in an investigation of fraud relating to procurement by the Ministry of Defence. Myroniuk now works for Progress, the state specialist export company.

Source: an article published in Ukrainska Pravda, Millions of ex-officials, kickbacks and fake body armour. The story of procurement fraud in the Ministry of Defence

Details: On 31 August 2022, the Ukrainian media was rocked by the news that a property belonging to Bohdan Khmelnytskyi, then head of the Public Procurement Department of the Ministry of Defence of Ukraine (MDU), was being searched. Khmelnytskyi was suspected of being involved in dealing in body armour.

At the time, Ukrainska Pravda (UP) sources were convinced that a huge amount of money had been confiscated from a Defence Ministry official, who had allegedly hidden it in his sofa.

When questioned by UP, the Ministry of Defence admitted that searches had taken place at Khmelnytskyi's house, but stated that no funds had been confiscated from him.

Now UP has discovered that the huge amount of money was confiscated during a search at a property owned by former deputy minister Oleksandr Myroniuk, who also happened to be in charge of the Procurement Department before his dismissal in 2021. This official is also involved in the body armour case.

During the searches, UAH 17,000,078 [approximately US$463,000], US$400,100 and €100,380 were found in Myroniuk's possession.

The investigator ruled that the money should be admitted as material evidence in the criminal proceedings, and the investigators immediately requested that the court seize these sums.

But from that moment on, the course of events took several interesting turns.

On 7 September, the investigating judge of the Pechersk District Court refused to seize Myroniuk's millions, although that very day it had seized other property that had been confiscated during searches relating to the case.

On 12 September, the Pechersk court nevertheless seized the money. But all the rulings are absent from the court register.

Two months later, on 17 November, Myroniuk's lawyers managed to have the seizure cancelled through the Kyiv Court of Appeal. The judgment was published in the register further to a request from UP.

According to the judge, the investigators had not provided sufficient evidence that the money was the object or result of a crime. In addition, the Unified Register of Pre-trial Investigations contained no information that Myroniuk was involved in the case or that he had been served a notice of suspicion.

The investigators, however, said they "consider Myroniuk's involvement to have been established". According to UP, the police are convinced that the former deputy minister is not merely involved but could also be among the organisers of the criminal scheme.

On 8 December 2022, the Pechersk court additionally ordered the police to immediately give Myroniuk back his millions, since the seizure had already been lifted. Interestingly, no representatives of the prosecution were present at this session, and the judgment was published quietly just before New Year, on 27 December.

It later transpired that the millions recovered from the sofa of the official who had worked for years for state-owned companies and the government were apparently not his, but had been borrowed.

UP has discovered that immediately after the searches, Myroniuk provided the court with a "document" showing that the money from the sofa was not his. A notarised statement, concluded a week after the searches, said that Eleonora Duminsh, an 86-year-old resident of Kharkiv, had lent all the seized money to Myroniuk in January 2022.

The journalists found out that Duminsh was a relative of the founders of Kharkiv-based Xado-Holding, which, among other things, deals with the production of rifles. In addition, Eleonora Duminsh has been registered as a sole trader for wholesale trade since 2016, and when she registered, she gave an email address and phone number belonging to Xado.

Xado has a longstanding working relationship with Progress, where Myroniuk was employed before and after working for the Ministry of Defence.

At one time, Progress had exclusive rights to promote Xado products for export.

UP has asked Myroniuk to comment on the "loan", calling all the phone numbers they have for him, but had not received any response by the time this article went to press.

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