Ukrainian anti-corruption authorities have uncovered a large-scale fraud operation involving inflated state contracts for military drones and electronic warfare (EW) systems, implicating a sitting Member of Parliament, senior regional officials, and National Guard personnel.
Prosecutors are seeking the arrest of MP Oleksii Kuznietsov with bail set at ₴30 million (approximately €700,000), amid broader legal action against several individuals linked to the scheme.
The investigation, led jointly by the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialised Anti-Corruption Prosecutor’s Office (SAPO), alleges that an organised group systematically embezzled funds allocated for Ukraine’s defence sector between 2024 and 2025. The suspects reportedly received kickbacks of up to 30% on state contracts signed with selected suppliers at inflated prices.
According to SAPO, the court has received formal motions seeking pre-trial detention or equivalent bail for all primary suspects. These include:
Oleksii Kuznietsov, MP (Servant of the People);
Serhii Haidai, former head of Luhansk Regional Military Administration and current head of Mukachevo District Administration;
Andrii Yurchenko, head of Rubizhne Municipal Military Administration;
An unnamed National Guard unit commander;
The beneficial owner and director of a drone manufacturing company.
The charges, filed under multiple articles of the Ukrainian Criminal Code, include large-scale embezzlement (Article 191), participation in an organised criminal group (Article 28), acceptance of unlawful benefits (Article 368), and obstruction of the Armed Forces’ legitimate activities (Article 114-1). The latter relates to allegations that the UAV company’s management provided fictitious employment and arranged draft exemptions in exchange for payments, thereby hindering military mobilisation.
One specific transaction under scrutiny involved the purchase of FPV drones valued at nearly ₴10 million (approx. €230,000), with equipment reportedly supplied at prices inflated by about $80,000 (approx. €73,000). A separate deal involving EW systems followed a similar structure. Investigators state that a portion of the contract sums was redirected as illicit compensation to members of the criminal group.
The exposure of the scheme follows a significant political development. Just two days prior, Ukraine’s parliament voted to restore the institutional independence of NABU and SAPO, reversing legislation passed in July which placed the agencies under the control of the Prosecutor General. That move—backed at the time by Kuznietsov—triggered widespread criticism from the public, civil society, and Ukraine’s Western partners.
In a televised address on 2 August, President Volodymyr Zelenskyy described the corruption scheme as “absolutely immoral” and reiterated the importance of independent investigative institutions. “Unfortunately, these corruption schemes involved the procurement of electronic warfare systems and FPV drones,” he stated. “There must be full and fair accountability for this.”
Zelenskyy had earlier posted photos of a meeting with the heads of NABU and SAPO, affirming that the newly adopted law guarantees the agencies “all the tools necessary for a real fight against corruption.”
The Interior Ministry confirmed that the National Guard officers implicated have been removed from duty. NABU and SAPO have reported four arrests so far.
Drone procurement has been a strategic priority for Ukraine amid its ongoing war with Russia. Unmanned systems play a central role in reconnaissance, target acquisition, and strike operations. Long-range UAVs such as the An-196 Liutyi—shown in service with Ukraine’s Defence Intelligence—are considered critical assets. The integrity of procurement in this sector is viewed as vital not only to battlefield effectiveness but also to broader national security.
The leader of the ‘Servant of the People’ parliamentary faction, Davyd Arakhamia, has confirmed that Kuznietsov’s membership in the party will be suspended for the duration of the investigation.
Fighting corruption remains one of the key conditions for Ukraine’s EU accession ambitions and continued access to Western financial and military assistance. Public support for reform remains high, and the swift unmasking of the procurement scheme has been welcomed by domestic watchdogs and international observers alike.
