Scheme of ₴34m embezzlement for SMM services for city council exposed in Dnipro

Law enforcement officers uncovered a scheme to embezzle funds from the Dnipro city budget, which caused at least UAH 34 million in losses to the state. The scheme involved officials of the Dnipro City Council, the head of a subordinate utility company and individual entrepreneurs. 

This was reported by the National Police and the SBU. 

The money was embezzled by three owners of local advertising agencies who acted in cooperation with city council officials. The deal consisted of ‘their entrepreneurs’ winning tenders for SMM, advertising and coverage of the Dnipro City Council.

In this way, they managed to embezzle almost a third of the total amount of UAH 123 million that the city council had allocated for its own promotion in 2021-2023.

The organiser of the scheme is a 38-year-old entrepreneur whose company previously provided advertising services to the city's utilities.

With the assistance of Dnipro City Council officials, he lobbied to win a tender for the purchase of advertising and marketing services for eleven individual entrepreneurs under his control, who in real life work as manicurists, construction workers, taxi drivers, accountants, electrical appliance salespeople and other professionals whose work is not related to the provision of professional SMM services. 

It was with them that the specialised utility company of the Dnipro City Council had been concluding contracts for the provision of advertising and marketing services to cover the activities of the city council, its executive bodies, officials and deputies through the media, social networks and messengers for three years. 

At the end of September this year, the police conducted 16 authorised searches at the residences and workplaces of the defendants, during which they seized mobile phones with correspondence on criminal activity, bank cards used for cash withdrawals, original financial and business documentation between the ME and controlled individual entrepreneurs and other evidence of criminal offences.

The National Police investigators served ten defendants, including the organiser, with a notice of suspicion of embezzlement of property by abuse of office committed under martial law and on a particularly large scale as part of a criminal organisation (Art. 255(1), (2), Art. 28(4), Art. 191(5) of the Criminal Code of Ukraine). The police detained nine out of ten members of the criminal organisation in accordance with Article 208 of the CPC, one of the perpetrators has been hiding abroad since 2023.

The defendants face up to twelve years in prison and the right to hold certain positions with confiscation of property. The pre-trial investigation is ongoing, and other persons involved in the crime are being identified.