A "conversion center" used to evade taxes on defense contracts has been uncovered in Ukraine
Law enforcement officials have uncovered and dismantled a criminal organization that had set up a "money laundering scheme" to launder funds and evade taxes. Among the scheme's clients was a company that carried out defense contracts for the Ministry of Defense and the National Guard.
This was reported by Ukraine’s Prosecutor General Ruslan Kravchenko.
According to the investigation, of the 2.5 billion hryvnias in state funds received by the company in 2023–2025 for the repair of military equipment, over 576 million hryvnias were diverted into the shadow economy.
The funds were transferred through shell companies for non-existent goods and services, after which they were returned in cash.
The scheme utilized so-called “shell companies” that existed only on paper—without staff, production, or actual management, including those from temporarily occupied territories and fictitious foreign beneficiaries.
Through a network of transit companies, the funds were “laundered” and partially returned to the clients in cash, while the scheme’s organizers received a percentage for their “services.” Additionally, according to expert assessments, over 100 million UAH in tax losses were incurred.
During the investigation, over 40 searches were conducted, and cash, vehicles, equipment, seals, and off-the-books accounting records were seized.
Seven suspects have been notified of the charges against them. They are currently in custody without the right to post bail.
The investigation is ongoing—law enforcement officials are identifying all individuals involved in the scheme.
In addition, the Office of the Prosecutor General, together with the Bureau of Economic Security, uncovered a large-scale tax evasion scheme that had been used for several years by a group of companies engaged in the sale of consumer goods in various regions of Ukraine.
Over 800,000 Ukrainianswork for sole proprietorships.
Individual entrepreneurs must pay all taxes by March 20: details.
Individual entrepreneurs who losttheir businesses due to the war can apply for compensation.
Small businesses in Ukraine are facing serious difficulties due to Russia’s frequent attacks on energy infrastructure, which cause prolonged outages of electricity, water, and heat during the winter season at temperatures of −20 °C.
