"Kickbacks" and "golden diapers": law enforcement officers discovered a series of abuses in the Social Policy Department of the Kyiv City State Administration

Law enforcement officers claim that a former employee of this department regularly received 10% kickbacks from each contract directly in her husband’s car and then transferred the funds to her immediate supervisor. Moreover, the law enforcement officers calculated that the cooperation of this KCSA structure with three private companies in 2017-2019 led to a loss of about 6 million hryvnias from Kyiv’s budget (according to new data – 13.5 billion hryvnias). It is likely that the head of these schemes was the former director of the Department of Social Policy of the KCSA, Yuriy Krykunov (pictured left).

As KV has learned, law enforcement agencies are currently investigating at least two criminal proceedings related to possible abuses by officials of the Department of Social Policy of the KCSA.

Thus, on March 22, 2021, the Pechersk District Court of Kyiv extended the investigation period of criminal proceeding No. 42019100000000635 for 12 months - until March 30, 2022. It is likely that within the framework of this criminal proceeding, yesterday, May 12, the Kyiv Prosecutor’s Office conducted searches in the Department of Social Policy of the KCSA. In addition, on April 30, 2021, the Holosiivskyi District Court extended the investigation of criminal proceeding No. 62019100000000500 for 6 months (until November 30, 2021).

"Golden" medical products

Criminal proceeding No. 42019100000000635 was opened by the Main Directorate of the Security Service of Ukraine (SSU) in Kyiv on September 30, 2019. The preliminary legal qualification of this case is Part 5 of Article 191 of the Criminal Code of Ukraine (misappropriation, embezzlement of property or seizure of it by abuse of office on a particularly large scale or by an organized group). Within the framework of this proceeding, investigators are studying the procurement of medical products by the Department of Social Policy of the KCSA "with violations of current legislation at inflated prices" in 2017-2019.

Excerpt from the case materials

According to the investigation, during this period, the Department of Social Policy of the KCSA transferred 77.2 million hryvnias to three companies - Bloomy LLC (*), Alternatyva Trade LLC (**), and Ukrainian-American LLC Euromix (with foreign investments) (***). With this money, these companies supplied personal hygiene products for socially vulnerable groups to the department: diapers, adult diapers, pads, diapers for children with disabilities, etc.

As law enforcement officers found out, the mentioned LLCs inflated the supply and sales markup on these products (price including various commissions, taxes, etc. - KV). According to the case materials, as a result of such violations, a damage of over 6 million hryvnias could have been caused to the city budget (preliminary estimates of investigators. - KV). At the same time, yesterday, the prosecutor’s office announced damages amounting to 13.5 million hryvnias.

During the investigation, the SSU has already interrogated the officials of the Department of Social Policy of the KCSA and the mentioned suppliers of medical products, conducted document seizures in the offices of the case participants, etc. By March 30, 2022, the investigators also plan to interrogate the officials of the importing companies of such products, obtain access to information about funds movement on bank accounts of the aforesaid LLCs, appoint judicial commodity and economic examinations, which should establish the exact amount of damage inflicted on the city budget, etc.

10% kickbacks

Criminal proceeding No. 62019100000000500 was opened by the Territorial Investigation Division of the State Bureau of Investigation (SBI) in Kyiv on May 3, 2019. Law enforcement officers assume that the participants of this case committed crimes provided by three articles of the Criminal Code of Ukraine:

• Part 4 of Article 190 – fraud committed on a particularly large scale or by an organized group;

• Part 2 of Article 364 – abuse of power or office, causing severe consequences;

• Article 366-1 – declaration of false information.

During the pre-trial investigation, law enforcement officers established that officials of the Department of Social Policy of the KCSA facilitated the victory in tenders for controlled companies conducted by this department or its subordinate institutions. The case materials do not specify when this happened or which companies the SBI considers "controlled". However, according to the investigation, as a result of purchasing under such tenders, goods were procured at inflated prices – "for the purpose of obtaining illegal profits (kickbacks) in the form of money".

The focus of law enforcement officers was on the director of the Department of Social Policy of the KCSA and his subordinate – the head of the financial control and audit department of the same department. According to the investigation, the latter repeatedly received "kickbacks" directly in the Ford Kuga car belonging to her husband, in the amount of 10% from the purchase sum from representatives of companies that won tenders. Also, as the SBI found out, in the same car she handed over these "kickbacks" to her head – the director of the mentioned department.

In the case materials, the names and surnames of the investigation participants are still concealed. However, it can be assumed that law enforcement officers were interested in the activities of the former director of the Department of Social Policy of the KCSA, Yuriy Krykunov, who headed this structure from February 2015 to May 15, 2019. Krykunov was essentially dismissed a week and a half after the opening of this proceeding. Interestingly, along with his official work, Krykunov was also a Kyiv City Council deputy of the previous convocation from the "pro-government" "Solidarity" party. Regarding his "assistant-intermediary", it is likely that we are talking about Iryna Sabishchenko, who also no longer works in the mentioned department: on March 29, 2021, she filed an declaration after being dismissed from her position as head of the financial control and audit department. According to the declaration, her husband indeed owns (or "owned") a Ford Kuga car.

It is noted that in the court rulings of this proceeding, it is not yet specified why the SBI "sues" the case participants for "declaration of false information" (Article 366-1 of the Criminal Code of Ukraine). One can assume that law enforcement officers were interested in the "non-declaration" of a prestigious 2019 model Toyota Land Cruiser vehicle by one of the case participants. This vehicle is mentioned in the investigation materials: allegedly, since 2019 it has belonged to the wife of the "unnamed" director of the Department of Social Policy of the KCSA. In Yuriy Krykunov’s declaration for 2019, there is indeed no car of this brand and model, but in the declaration for 2020, a "similar" car of the same year of manufacture is already indicated. According to the report, it really belongs to the wife of the ex-official, but the woman allegedly did not provide information about when she acquired it.

Excerpt from the case materials

According to the case materials, during the investigation, the SBI has already received permissions from the Pechersk District Court to conduct searches in the aforementioned Toyota and Ford vehicles, at the place of residence of the participants, etc. By the end of the investigation period (November 30, 2021), the investigators plan to interrogate the officials of the Department of Social Policy of the KCSA, obtain the results of handwriting analysis, which should examine signature samples in contracts concluded between the mentioned department and several companies, etc.

About the participants

According to the analytical system Youcontrol, the Odesa-based LLC "Bloomy" was founded in May 2014. Its director is Oleksiy Terziyants. The ultimate beneficiaries of the company are Olha Klisheyko, Borys Klyuchnykov, Petro Nyahov, and Arkadiy Hubernyk.

Note that Arkadiy Hubernyk was a deputy of the Odesa Regional Council from the "BPP "Solidarity" in the previous VII convocation. In the 2020 local elections, he unsuccessfully ran for the same body from the "Servant of the People". In turn, Borys Klyuchnykov and Petro Nyahov were his assistants during his "deputy" time in the Odesa Regional Council.

The Kharkiv-based LLC "Alternatyva Trade" was registered in November 2011. The company is managed by Volodymyr Popov, who, together with Eduard Kharchenko and Viktoriya Mariyenko, are listed as company signatories. Dmytro Opashko is the ultimate beneficiary of this LLC.

Ukrainian-American LLC "Euromix" was founded in April 1999. The company has a Kyiv "registration". It is headed by Roman Rudovol, and the signatories are Anastasiya Sladkova and Viktoriya Feshchenko. 99.9% of this LLC’s assets belong to JSC "VISTA INVESTMENT GROUP", and the share of the statutory capital is owned by Nataliya Sklyarenko.

The Youcontrol system identifies the Ukrainian-American LLC "Euromix" as part of the Tuhay family group. The main asset of this group, whose key person is Volodymyr Tuhay, is the proStor chain of cosmetics and care product stores, which includes about three hundred stores in more than one hundred cities of Ukraine.

As KV has repeatedly reported, the Department of Social Policy of the KCSA regularly figures in scandals related to questionable budget spending.

For instance, in 2017, public activists discovered that Yuriy Krykunov was distributing budget funding for the "Social Partnership" program among Kyiv’s non-governmental organizations (NGOs) in a "manual mode". As a result, material assistance "from Krykunov" was received, for example, by 27 organisations of the disabled, which were registered at the same address as his close relative’s enterprise.

In 2018, KCSA auditors found violations in the purchases of various goods and services by this department amounting to 76.3 million hryvnias (for the period 2016-2017). At that time, the "auditors" concluded that for two years this department poorly cared for people with disabilities (the purchased equipment remained unused at suppliers’ warehouses for months and was disassembled at the time of the inspection), inadequately provided recreation for children of ATO participants, non-transparent spent budgetary funds on holidays, and simply "purchased air".

Recall also that in 2020, at the end of the last Kyiv City Council convocation, deputies decided to audit the tenders conducted by the Department of Social Policy of the KCSA. The reason was a scandalous purchase of diapers for bedridden patients: that same year these hygiene products were allegedly purchased at an inflated price, granting victory in the auction to a predetermined company. Notably, the working group, which was supposed to study such facts, was headed by Yuriy Krykunov, who was already dismissed from this department.

It should be noted that after the dismissal of Yuriy Krykunov, since September 24, 2019, the Department of Social Policy of the KCSA has been headed by Ruslan Svitlyi (pictured right). The activities of this structure since the beginning of 2019 are overseen by the deputy head of the KCSA, Maryna Khonda.

* LLC "Bloomy" (EDRPOU code: 39215751);

** LLC "Alternatyva Trade" (EDRPOU code: 37878035);

*** Ukrainian-American LLC "Euromix" (EDRPOU code: 24998380).

Photo: collage KV

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