Ukraine lost $770 million on prepayments for weapons: FT investigation into failed deals
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Since the start of the full-scale invasion, Ukraine has paid about $770 million in advance to foreign intermediaries for weapons and ammunition that have never been delivered, an investigation says Financial Times .

The newspaper found information about three dozen problematic contracts, and the article describes two of them in detail.

Contract with OTL Imports

In one case, a specialty importer company, Progress, signed a contract with an American ammunition store, OTL Imports, from Arizona.

Its founder, 28-year-old entrepreneur Tanner Cook, was introduced to Progress by another businessman who had previously helped the state-owned enterprise organize a major deal with Iraq in 2009 .

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Cook said he could bring shells and mortar shells from a manufacturer in Serbia. In November 2022, Ukraine paid him €17.1 million in advance (35% of the contract amount), but did not receive the ammunition.

The contract has become the subject of a criminal investigation by the NABU, which is trying to track down where the money paid to the company went.

"Progress won the arbitration proceedings against OTL in Vienna. The award provides for the recovery of €21.3 million from the company, which includes an advance payment, as well as legal fees, interest and penalties. The state-owned enterprise is now trying to secure the recognition of this arbitration award in the United States.

Meanwhile, thanks to the Ukrainian contract, Cook began expanding his business, traveling to international arms exhibitions, and, judging by his social media posts, living a luxurious lifestyle.

Contract with Regulus Global

Another unsuccessful contract was signed with the American Regulus Global, founded by former Merrill Lynch broker Will Somerindyke in 2012. The company is engaged in searching for and buying back old stockpiles of weapons.

At the end of 2022, Regulus Global approached Spetstechnoexport with an offer to sell tens of thousands of 155 mm artillery shells. The offer was particularly valuable because the ammunition was to come from a manufacturer in a country with close ties to Russia.

A contract worth up to $1.7 billion was signed (the exact amount depended on the volume of supplies).

Spetstechnoexport paid Regulus $162.6 million in advances and deposits to fulfill part of the contract, and made other payments worth €14 million.

But then, according to Spetstechnoexport, Regulus violated the terms of the contract and did not return the money. Since September 2024, Regulus has ceased all contact and stopped responding to letters. Ukrainian officials believe that Regulus spent the prepayment on production facilities and other assets: "They used the money we sent them...to buy new assets," said Oleksiy Petrov, former head of Spetstechnoexport.

Spetstechnoexport is trying to recover the money through the courts. Its arbitration claim in London seeks to recover $346 million from Regulus, including prepayments, as well as outstanding debts and fines.

Regulus categorically denies these accusations and claims that it is Spetstechnoexport that has not fulfilled the terms of the contract and owes approximately $350 million.

In September 2023, Regulus attempted to transfer its contract from a state intermediary to the newly created Defense Procurement Agency of Ukraine under the leadership of Maryna Bezrukova. However, this move was blocked by Bezrukova after, according to her, Regulus asked for another advance payment.