Russian Defense Ministry scandal implicates two further suspects

An ongoing investigation into the embezzlement of funds and assets from a Russian Defense Ministry holding company, called Oboronservis, has led to the detainment of two new suspects, accused of stealing more than RUB 10 mln from the Ministry, the Russian media reported June 6.

“A Moscow court has detained two suspects implicated in the theft of over 10 million rubles (USD 313,000) as part of the expanding Oboronservis corruption scandal centered around the Defense Ministry’s spending,” The Moscow Times reported.

The court ordered that the former general director, and the head accountant, of the Defense Ministry’s Engineering and Technological Center, headquartered in St. Petersburg, be detained on charges of embezzlement and fraud at Oboronservis.

The story first hit the media in November 2012 and led to the heavily publicized sacking of Defense Minister Anatoly Serdyukov by President Vladimir Putin.

The investigation also involves former Defense Ministry Director in charge of real-estate, Yevgeniya Vasilyeva, who was reportedly Serdyukov’s lover. She coordinated activities in Oboronservis while the Defense Minister was the supervisory board chief.

Vasilyeva pleaded not guilty to defrauding state property, while Serdyukov, who has been summoned to court on a number of occasions, has refused to give evidence.

The state is running seven separate probes into Oboronservis. It is estimated that it has incurred some RUB 6.7 bln in losses from the illegal activities at the company.