Misappropriation of state grants for horticulture: Economic Security Bureau of Ukraine exposes scheme

 Detectives of the Main Detective Unit of the Economic Security Bureau of Ukraine have exposed a scheme involving the misappropriation of state funds through a grant program.

The investigation established that officials from several legal entities, in prior conspiracy with officials from the Ministry of Agrarian Policy of Ukraine and authorized persons from the Zakarpattia Regional Department of JSC 'Oshchadbank,' committed fraud involving budget funds under the program 'Grants for the Creation or Development of Horticulture, Viticulture, and Berry Growing.'

Contrary to the established criteria of Ukrainian legislation, grants were provided in the absence of actual plantings or for orchards planted previously, which precludes the possibility of re-financing.

ESBU detectives determined that between 2022 and 2023, approximately UAH 80 million in state aid was unjustifiably transferred to the accounts of these legal entities.

Subsequently, to disguise the origin of the budget funds, they were transferred to the accounts of controlled individual entrepreneurs (FOPs) and other business entities through fictitious transactions—without the actual purchase of seedlings, netting, wire, or other equipment.

Bureau officials conducted over 45 searches and inspections, during which Hungarian passports were discovered in the possession of the suspects, indicating dual citizenship.

Under paragraph 5 of Cabinet of Ministers Resolution No. 738, only citizens of Ukraine are eligible to receive grants; therefore, the participation of individuals with foreign citizenship in the program violates legislative requirements.

Furthermore, during the pre-trial investigation, inspections of the land plots revealed that they were partially overgrown with brush, effectively uncultivated, and lacked any planted saplings. No evidence of plowing, cultivation, fertilization, or the installation of drip irrigation systems was found. On certain plots, unbranched apple saplings were present, but without drip irrigation systems or any signs of soil management.

During the pre-trial investigation, ESBU detectives also confirmed the suspects' criminal intent to misappropriate budget funds: in their communications, they discussed the absence of plantings, agreed on the forgery of documents, and other matters.

Currently, the pre-trial investigation is ongoing under Part 2 of Article 364 (Abuse of Power or Office), Part 2 of Article 222, and Part 2 of Article 209 (Money Laundering) of the Criminal Code of Ukraine. A series of forensic examinations is planned.

Operational support was provided by officers of the Cyberpolice Department of the National Police of Ukraine. Procedural oversight is conducted by prosecutors of the Office of the Prosecutor General.