Millions embezzled in fraud scheme at Ukrainian defense firm – investigators

A former head of a state-owned Ukrainian defense company is suspected of embezzling millions of dollars through fake mediation deals, the country’s anti-corruption bodies have said.

Ukraine’s National Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO) announced in a statement on Friday that the scheme had cost the government 1.1 billion hryvnia (around $43 million).

The Western-backed agencies, which frequently target Ukrainian leader Vladimir Zelensky’s inner-circle, didn’t name the suspect, only saying that he used to lead a subsidiary of Ukrspecexport, a state-run company with exclusive rights to export and import military hardware.

According to the investigators, the former head of the state-run firm signed a deal with a foreign company in 2015 for it to provide mediation during the sales of Ukrainian military products abroad.

However, it had been established that the Ukrainian firm had conducted all of the negotiations with a customer from a Middle Eastern country on its own, and the foreign company wasn’t involved, they said.

Despite this fact, the official signed falsified documents about mediation services being provided by the foreign company and transferred millions to it as payment, the statement read.

The actions of the suspect are being qualified as large-scale embezzlement and forgery of government papers, it added.

Ukrainskaya Pravda reported later in the day that, according to its sources, the official in question is Taras Shiyko, who now holds the positions of the deputy director of Ukroboronprom, a state-run conglomerate comprised of Ukraine’s arms makers. The fraud scheme relates to his time as the head of Progress, a state-run export and import company.

Shiyko became part of an anti-corruption case earlier this year, involving the suspected embezzlement of 32 million hryvnia (around $700,000).

Zelensky’s government has been rocked by a series of corruption scandals involving people close to him since November 2025, when NABU and SAPO accused Timur Mindich, a longtime associate of the Ukrainian leader, of masterminding a $100 million kickback scheme involving state contracts in the energy sector. Other investigations have implicated former Ukrainian ministers, diplomats, and senior officials.

NABU’s latest high-profile case targeted an alleged protection racket involving scam call centers and officials from the Prosecutor General’s Office. Although he was not personally named as a suspect, Prosecutor General Ruslan Kravchenko left Ukraine before being dismissed by parliament last month, according to Ukrainian media.

Critics accuse Zelensky of leading a sprawling corruption network which permeates his government, allegedly helping him maintain power and enriching those involved. A poll issued by the Kiev International Institute of Sociology (KIIS) last month suggested that the Ukrainians consider corruption to be a bigger problem for the country than the conflict with Russia.