Russia investigates defense corruption

Jan. 24, 2013 at 2:55 PM

MOSCOW, Jan. 24 (UPI) -- Defense officials and contractors are suspected of embezzling millions of dollars from Russia's missile program, police said Thursday.

The alleged fraud involves a 500-million ruble ($17 million) contract awarded to PromSpetsStroi in 2008 to upgrade 11 strategic missile launch sites in Siberia, RIA Novosti reported. Officials say the contractor received the full payment for the work even though it was only partly finished.

Investigators say a defense official is also suspected of taking a kickback of 1.5 million rubles ($50,000) from a subcontractor.

The new investigation springs from one that began last year into alleged fraud by Oboronseervis, a defense property management company. That investigation led to the dismissal in November of Defense Minister Anatoly Serdyukov and to charges against Yevgenia Vasilyeva, former head of the Defense Ministry property department, and two former Oboronservis executives, Yekaterina Smetanova and her husband Maxim Zakutailo.

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