Embezzlement of UAH 20 million in traffic light procurements: ESBU charges 7 suspects in budget fund misappropriation scheme

 Detectives of the ESBU Territorial Office in the Odesa region have uncovered an organized group involved in the embezzlement of local budget funds. The suspects misappropriated over UAH 20 million during the procurement of Uninterruptible Power Supplies (UPS) for traffic lights.

The investigation established that the owner of a group of companies, along with officials from the Municipal Institution 'Specialized Installation and Operational Unit' of the Odesa City Council, organized a scheme to misappropriate budget funds. The perpetrators concluded contracts for the supply of UPS units through controlled firms at inflated prices.

The officials determined the expected procurement value based on fictitious commercial offers without any actual market analysis. Furthermore, technical requirements were tailored to a specific manufacturer, effectively excluding other participants from the bidding process.

Over five months in 2024, the municipal institution conducted 11 procurements and signed contracts worth over UAH 40.8 million. The winners were enterprises acting in collusion with the scheme’s organizer.

An analysis of tax invoices revealed that the companies purchased the equipment from a controlled entity, which, in turn, acquired it from a manufacturer—also linked to the organizer. Consequently, the supply price to the municipal institution was approximately twice as high as the original cost.

According to the findings of forensic economic expert assessments, the Odesa territorial community suffered damages exceeding UAH 20.9 million.

Based on the evidence collected, of suspicion have been served to seven individuals, including the organizer of the scheme, the director of the municipal institution 'SMEP,' executives and employees of the enterprises, a lawyer, and a procurement specialist. The court has ordered preventive measures for the suspects, ranging from remand in custody with the right to post bail to 24-hour house arrest.

The pre-trial investigation into criminal offenses under Part 4 and Part 5 of Article 191 (misappropriation, embezzlement, or seizure of property through abuse of office) and Part 1 of Article 366 (official forgery) of the Criminal Code of Ukraine is ongoing. Operational support is provided by ESBU strategic economic protection detectives in the Odesa region, the Strategic Investigations Department of the National Police of Ukraine in the Odesa region, and the Security Service of Ukraine (SSU) in the Odesa region. Procedural oversight is conducted by the Odesa Regional Prosecutor's Office.