New Fraud Found at Russian Defense Company

New Fraud Found at Russian Defense Company

MOSCOW, November 7, 2012 (RIA Novosti) – A fresh investigation into fraud involving at least 240 million rubles ($7.7 million) has been launched into Russian Defense Ministry property management company Oboronservis, investigators said on Wednesday.

The new case is the latest in a string of investigations into Oboronservis involving over $100 million in embezzlement, which has already cost the Defense Minister his job.

The latest case involves a transshipment terminal in Murmansk, northwest Russia, which Oboronservis sold off at below market value to a Moscow air force depot in 2010, Prosecutors revealed on Wednesday .

The terminal, with estimated value of 452 million rubles ($14.4 million), was a key part of the region’s military infrastructure, and was used to supply fuel to ships of the Russian Northern Fleet.

Shortly after the deal, the terminal was formed into a joint-stock company and privatized.

“The Board of Directors of the joint-stock company, in accordance with an order from the defense minister, considered the complex was useless for the Fleet and decided to sell it off,” investigators said.

A criminal case may be opened into large-scale embezzlement and abuse of authority, investigators added.

Five criminal cases are underway in connection with the Oboronservis scandal, which became public on October 25, when investigators raided the 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.

Two suspects were initially arrested, investigators said. Another Oboronservis official was detained by police on Wednesday.

Police say the official has been charged with attempting to sell property in the Moscow Region at below market value. The official asked the buyers for some 3 million rubles ($96,000) for his “services,” investigators said.

On Tuesday, a police source said the former head of Defense Ministry’s property department, Yelena Vasilyeva might have fled the country. Her house was searched last week as part of the investigation. Investigators seized antiques, jewelry and 3 million rubles ($96,000).

President Vladimir Putin relieved Defense Minister Anatoly Serdyukov of his duties on Tuesday. Putin linked Serdyukov's dismissal to the investigation to the Oboronservis corruption scandal.

Oboronservis, set up in 2008, carries out repair and services for Defense Ministry properties as well as repair and maintenance of military equipment and provision of services to military garrison towns.