Investigators have started a probe into a possible $100 million real estate fraud conducted by a commercial company controlled by the Russian Defense Ministry.
The Central Investigation Committee – Russia’s top law enforcement body dealing with high-profile cases – said it had started five criminal cases into alleged embezzlement of about 3 billion roubles (US $100 million) involving the Oboronservis company.
Law enforcers suspect Defense Ministry officials of investing heavily into real estate before selling it to affiliates for prices well below market prices, the Investigative Committee’s spokesman said in a televised statement.
A part of the probe a team of investigators searched the apartment of Yevgeniya Vasilyeva – the former head of the Defense Ministry’s property relations department. According to the Lifenews web-site, law enforcers were met at the door by Defense Minister Anatoliy Serdyukov. The minister asked to be present during the search as a witness and after it was completed went directly to the Oboronservis’s office, where another group of officers were searching.
On the same day Serdyukov missed the government session and sent his deputy to replace him. However, Prime Minister’s press secretary told the press that Serdyukov had a pre-scheduled meeting with the Upper House speaker Valentina Matviyenko and his absence at the government session was nothing unusual.
Anatoliy Serdyukov, is Russia’s first civilian defense minister and has had to push through extensive and unpopular reforms within the military. The previous generation of ministry bureaucrats were mostly career military men and their attitude to Serdyukov is extremely negative. Russian media has repeatedly seen smear campaigns against the minister, who has been accused of not being up to the job because he was previously the head of a furniture factory. While the furniture factory is listed in Serdyukov’s biography, before the ministerial appointment he headed the Federal Tax Service.
A number of internet posts have accused Serdyukov of manning the ministry with women – something the Russian military is allegedly not used to.
The Defense Ministry initially bluntly denied the reports of the searches and criminal investigation, but later in the day the general director of Oboronservis told reporters that his company’s office had been searched, but refused to elaborate.
Chief Military Prosecutor Sergey Friodinskiy told the press that Defense Ministry’s officials had obstructed the investigation into embezzlement in the sale of the military owned land. He said “A malicious system has been launched that squeezed money from state budget by means of joint stock companies controlled by the Defense Ministry”.
Defense Minister Serdyukov said the ministry was closely monitoring the situation with Oboronservis and stressed that any public statements on the amount of damage and the complicity of particular officials in the alleged fraud were nothing more than allegations. The minister stressed that Oboronservis was a separate commercial structure with its own regulation and management and noted that the Defense Ministry, just like anyone else, is interested in a detailed investigation into all charges the company managers are facing.
Later on Thursday, Serdyukov met with Vladimir Putin, who instructed him to “ensure full cooperation with the investigation launched into Oboronservis,” presidential press secretary Dmitry Peskov told journalists.