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Large-Scale Fraud At Russia’s Vostochny Cosmodrome Construction

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Large-Scale Fraud At Russia's Vostochny Cosmodrome Construction

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Russia’s Investigative Committee opened new cases of theft at the Vostochny Cosmodrome, Russian newspaper Kommersant reported.

The cases relate to fraud of over 250 million rubles ($4 million) identified during the construction of the launch pad for the Angara launch vehicle launched in the spring of 2019. As part of the investigation, searches and seizures of documents were carried out on November 21st.

According to Kommersant’s information, on November 15, the Investigative Committee for the Amur Region initiated two criminal cases of fraud on an especially large scale (part 4 of article 159 of the Criminal Code) during the construction of Vostochny’s facilities, which were then merged into one production.

Specifically, the cases include theft of, first 13.8 million rubles ($204 thousand), and then 242.6 million ($3.8 million) during the construction of the launch complex for the Angara launch vehicle in the ZATO Tsiolkovsky, which was launched in the spring of 2019. This project is estimated at 100 billion rubles ($1.57 billion). Only the launch pad itself is estimated at 40 billion rubles ($628 million). And should be commissioned in 2022.

As it was established by the investigation, between October 31st, 2018 and May 31st, 2019, officials from among the leaders of the Volga Construction Enterprise LLC (PSP), which under the contract was the executor of the state defense order for the object “Construction of the launch complex of the Angara space rocket complex – site 1A ”, located in the ZATO of Tsiolkovsky, Amur Region, knowingly provided “false information” to the Office of the Federal Treasury of Tatarstan regarding payments under special equipment rental contracts with Trio-VIS LLC (the main contractor from whom the special equipment is leased).

At the same time, according to investigators, the lease agreements were not actually executed, and the financial and business documents turned out to be fake. Nevertheless, the Office of the Federal Treasury of Tatarstan transferred through 13.8 million rubles to LLC Trio-VIS through PSP LLC.

Then, also in the same period, according to a similar scheme, the Office of the Federal Treasury of Tatarstan transferred through PSP LLC and the Kazan Industrial Production and Construction Association (PSO) an additional 242.6 million rubles after the the acceptance of allegedly completed work to the accounts of Dorstroy LLC and LLC Trio-VIS entirely based on falsified documents.

According to the investigation, the state budget was inflicted a total damage of more than 250 million rubles by the perpetrators.

The noteworthy part is, as per the Kommersant report – there are no suspects and nobody is being accused yet in the joint criminal case.

“A search is being carried out as part of the investigation of criminal cases of thefts at the cosmodrome initiated by the Investigative Committee,” the PSO Kazan confirmed, after searches were carried out of its premises on November 21st.

The construction of the Vostochny Cosmodrome in the Amur Region has been underway since 2012. According to the Prosecutor General’s Office of the Russian Federation, in 2014–2018, 17 thousand various violations were identified (embezzlement of budget funds, delayed construction time, non-payment of salaries, etc.) during its construction, more than 1 thousand people, including officials, were accused of misconduct.

The investigation opened 140 criminal cases, the damage from crimes is estimated at 11 billion rubles ($172 million), of which 3.5 billion rubles ($55 million) were returned. In total, 50 people were convicted under various articles of the Criminal Code of the Russian Federation, in 2018, 27 of them were sentenced.

On November 11th, 2019, Russian President Vladimir Putin said that the construction of the cosmodrome had not been adequately managed and they have “stolen hundreds of millions.” In turn, the head of Roskosmos, Dmitry Rogozin, said that “all those involved in corruption during the construction were removed from the project” and “there is no reason to worry.”

In June, the construction of the second stage of Angara began. Roscosmos stated that it is moving “under completely different principles”: money was allocated directly from the treasury via a letter of credit and so far there have been no alarming revelations and grounds to think that the funds are being spent inefficiently.

At the same time, the long delays in the construction of the Vostochny Cosmodrome was blamed on bad weather conditions.

Roscosmos has long been plagued by gross misconduct of funds. For 2018 some massive violations were discovered and they were still much lower than the 800 billion of rubles ($12 billion) of violations discovered for 2017.

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  • Assad must stay (gr8rambino)

    Here’s hoping all responsible are caught and punished and that the cosmodrome opens nicely

  • Jens Holm

    I kind of like that kind of thieves. Ours mainly are very small and can be compered with bad paid jobs.

    Nice Russians are quite open about that. We kind of feel, they are more semilar to us, rhen Putin and Lavrov pretend. Now they also almost drink as us. Very good for the integration.