Missile Forces Scam Cost Russia $3 Mln - Prosecutors

Missile Forces Scam Cost Russia $3 Mln - Prosecutors

MOSCOW, January 25, 2013  - A fraud in Russia’s Strategic Missile Forces (RVSN) has cost the state over 90 million rubles (about $3 million), the Prosecutor General’s Office (PGO) said on Friday.

The Interior Ministry said on Thursday police had uncovered embezzlement of hundreds of millions of rubles of state funds from Russia’s Strategic Missile Forces (RVSN), with high-level Defense Ministry officials and commercial executives suspected of involvement.

A series of checks and audits have been conducted across the country on 16 contracts signed between the Defense Ministry and various commercial organizations, the PGO said, adding that more than 10 million rubles has already been returned to the treasury as a result.

In 2008 the Defense Ministry allocated 500 million rubles (about $17 million) for modernization and upgrade of the RVSN's missile launch facilities.

The head of an RVSN department signed a 10-million ruble contract with the PromSpetsStroi (PSS) company for the modernization of 11 such facilities fin Siberia’s Orenburg region.

The contractor only partially fulfiled the contract and failed to meet required quality standards, but received full payment from the Defense Ministry and the RVSN department in question.

Investigators also found that a PSS director received a 1.5-million-ruble kickback from a subcontractor.

A criminal case has been opened on charges of graft, fraud and abuse of office.

The case is part of a wider probe into alleged fraud involving Defense Ministry assets worth at least $130 million at the ministry's property management firm Oboronservis. The investigation, involving at least a dozen separate instances of fraud, led to the sacking of Defense Minister Anatoly Serdyukov in November.

Three other people were arrested last year over the case, including the former head of the Defense Ministry’s property department Yevgenia Vasilyeva, and former Oboronservis executives Yekaterina Smetanova and her husband Maxim Zakutailo.

Senior Defense Ministry official Nikolai Ryabykh was also arrested in connection with the Oboronservis case on January 15, by order of Moscow's District Khamovnichesky Court, which said it feared "he could influence the investigation or flee."

SOURCES: ( RIA NOVOSTI)