01:34 GMT +3 hours25 November 2014
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Another Defense Contract Fraud Inquiry Underway

Russia
(updated 18:28 28.10.2014)
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The Russian Interior Ministry said on Friday it had uncovered a possible embezzlement of 53 million rubles (almost $1.7 million) in state funds by a defense subcontractor.

MOSCOW, November 16 (RIA Novosti) - The Russian Interior Ministry said on Friday it had uncovered a possible embezzlement of 53 million rubles (almost $1.7 million) in state funds by a defense subcontractor.

The possible embezzlement has uncovered in state funds, intended for maintenance of infrastructure at garrisons.

A subcontractor has received about 90 million rubles (about $3 million) for an extensive renovation of barracks and repairs in the building’s ventilation system.

“The subcontractor received about 90 million rubles for the purpose since 2011. At the same time, the building has recently been extensively renovated and had no ventilation system since 2010. The federal budget’s losses are estimated at 53 million rubles,” a spokesman for the defense ministry’s press service said.

Two suspects were detained in the case - the subcontractor’s general director and chief accountant.

The probe is underway by the Interior Ministry’s department of economic security and anti-corruption measures.

The Russian Defense Ministry has found itself at the epicenter of a spiraling state property scandal in the past weeks. The apartment of the former head of the ministry’s property department, Yelena Vasilyeva, was searched during an investigation into the case of selling state property below market value.

Several criminal cases are underway in connection with the Oboronservis scandal, which became public on October 25, when investigators raided the Defense Ministry property management company's offices and the homes of its senior employees over alleged real estate scams involving nearly $100 million. Some of the properties were in Moscow, which has some of Europe’s most expensive real estate.

On November 6, President Vladimir Putin relieved Defense Minister Anatoly Serdyukov of his duties “to create the requisite conditions for an objective investigation of all the issues.”