Corruption at ARMA: investigation of $12 million scheme completed
Photo: NABU press service

The National Anti-Corruption Bureau and the Specialized Anti-Corruption Prosecutor’s Office have completed an investigation into criminal proceedings regarding fraud in the sale of seized property transferred to the state-run Asset Recovery and Management Agency (ARMA), reported the NABU press service.

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11 people are suspected, including the head of an organized criminal group (OCG), lawyer Andriy Dovbenko, former head of the state-owned enterprise SETAM Viktor Vyshnyov, former head of the ARMA Anton Yanchuk, head of the Asset Management Department of the ARMA central office Vitaliy Reznik and others, journalist Oleh Novikov said.

According to the investigation, the head of the organized crime group developed a corruption scheme for the sale of seized property in 2017-2018. He was well aware of the specifics of the ARMA's work.

The scheme provided for the establishment of control over all stages of management of seized property: from the moment of transfer of physical evidence to ARMA to its sale at a reduced cost on a controlled trading platform to controlled companies.

The head of ARMA, as a participant in the crime, ensured the adoption of the necessary regulatory framework, which allowed to create the appearance of legality of manipulation of seized property in favor of the OCG.

One of the steps was a tender for the selection of a trading platform, under which only one entity, SE SETAM, could win. The CEO of SETAM helped to ensure that electronic bidding was conducted to sell seized property at reduced prices to predetermined companies.

Thus, the four-member OCG, together with seven other identified participants in the scheme, successfully implemented it at least four times in 2019.

These include sales of:

- three land plots in Odesa Oblast, which were purchased for the construction of shopping centers, were sold 18 times cheaper than the market value;

- 2,600 tons of medium and fine river sand in Kyiv Oblast (underestimation of the value by more than six times compared to the market value)

- more than 4,500 tons of urea – almost five times cheaper than market prices;

- grain, cereals and oilseeds – four times cheaper than the market price.

According to the conclusions of forensic examinations, the amount of damage caused exceeds UAH 430 million ($11.7 million)