Kyiv’s Ex-Tax Official Arrested in $37.5M Money-Laundering

Ukraine’s Security Service (SBU) said Friday it had dismantled a money-laundering network run by a former senior tax official, accusing him of creating a covert financial hub that funneled more than Hr.1.5 billion ($37.5 million) in stolen state funds into the shadow economy.

The SBU, in coordination with prosecutors, announced on Telegram the arrest in Kyiv of the alleged ringleader, a former deputy head of the State Fiscal Service. Posing as a lawyer, he is accused of operating a “conversion center” that funneled illicit funds into cash.

Investigators said he enlisted four accomplices, including two accountants and the head of an affiliated company, to manage dozens of shell firms. These companies, most of them inactive on paper, were allegedly used to obscure illegal transactions and launder proceeds from contracts with state-funded institutions, the SBU said.

Authorities believe the scheme allowed contractors to siphon public funds, disguising the profits as legitimate revenue. The group operated from an office in Kyiv, where they stored financial documents and met with clients.

During searches, security officers seized large sums of cash, fake company stamps, banking cards, computer equipment and accounting records allegedly linked to the operation.

All five suspects were taken into custody and are expected to be charged under Ukraine’s Criminal Code with large-scale tax evasion and money laundering. If convicted, they face up to 12 years in prison and may have their assets confiscated.

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NABU Uncovers $4M Corruption Scheme at Energoatom Hydropower Project

NABU and SAPO on Tuesday announced suspicions against two individuals in a corruption case involving the Tashlyk Pumped Storage Hydroelectric Power Plant. Investigators allege that equipment procurement contracts were manipulated through a controlled foreign intermediary, inflating costs by almost Hr.170 million and causing major losses to the state-owned energy company Energoatom.

The raids were carried out by Kyiv’s SBU directorate with support from the State Fiscal Service, the Financial Monitoring Service, and under the supervision of the Pechersk District Prosecutor’s Office, according to the SBU statement.

On Tuesday, Ukraine’s anti-graft agencies charged Ilya Vityuk, a brigadier general at the SBU, for illegal enrichment – essentially accusing him of taking bribes.

The SBU hit back, issuing a statement the same evening accusing the National Anti-Corruption Bureau of Ukraine (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO) of “selective justice.”

However, it is unclear if the incidents are related.