NABU reveals egg procurement fraud scheme at the Ministry of Defence

The National Anti-Corruption Bureau of Ukraine (NABU) has charged five individuals in a case involving the embezzlement of UAH 733 million in food supplies for the Armed Forces of Ukraine during martial law. At the centre of the scandal is the procurement of eggs at an inflated price of UAH 17 per unit.

In 2022–2023, the catering of military personnel was organised through the procurement of food kits comprising 409 items from an approved catalogue. The price was formed based on the average cost of all goods in the list, which gave suppliers the opportunity to manipulate prices: staple products were sold at triple the price, while rarely used items were sold at a reduced cost.

How did the scheme work?

Formally, the cost of the kit remained unchanged, but in practice, profitable items such as potatoes and eggs saw sharp price increases, while rarely purchased seasonal berries cost a mere pittance.

Thanks to this system, two companies owned by one entrepreneur received an illegal profit of UAH 733 million between August and December 2022. Later, part of these funds was withdrawn under the guise of dividends and financial assistance, allegedly directed towards the purchase of real estate, including hotels in Croatia.

The corruption scheme could not have operated without the assistance of senior officials. One of the key participants was a Ministry of Defence employee who signed contracts and turned a blind eye to price anomalies in the catalogue.

Who is at the centre of the scandal?

After media outlets raised this issue, suppliers urgently reduced prices on the 11 most popular products, which helped prevent further embezzlement of UAH 788 million from the budget.

Charges in the case were brought against:

• Bohdan Khmelnytsky — former head of the Ministry of Defence department for material support of the Armed Forces of Ukraine, previously implicated in other corruption investigations;

• Tatiana Hlynianaya — owner of the supplier companies;

• Two executives of these companies;

• An individual involved in the fraud.

In addition, NABU is investigating the possible involvement of former Deputy Defence Minister Vyacheslav Shapovalov and former Defence Minister Oleksii Reznikov.