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Probe shows Russian prisons defrauded

Feb. 28, 2013 at 5:23 PM

MOSCOW, Feb. 28 (UPI) -- The Russian Federal Penitentiary Service has lost more than $300 million to fraudulent financial transactions, investigators said Thursday.

Gennady Korniyenko, the head of the service, did not give any details about the fraud, the news agency RIA Novosti reported. He said they were uncovered by an audit of financial documents.

Recently, officials announced that Alexander Reimer, the former head of the penitentiary service, and his deputy ordered electronic bracelets that were both overpriced and useless. The bracelets, with a total cost of $32 million, were not linked to GLONASS, the Russian equivalent of the Global Positioning System, making them useless for monitoring the wearers.

Two employees have been charged with extorting $2.6 million from a businessman involved in the bracelet purchase.

The government launched an anti-corruption drive last year that led to the resignation of the defense minister in November.

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