Georgia’s State Security Service: former Defence Ministry officials detained on embezzlement charges

Georgia’s State Security Service on Sunday detained a former Deputy Minister of Defence, the former head of the Ministry’s Procurement Department, and a close relative of the then-Minister of Defence on charges of large-scale embezzlement.

The investigation has so far revealed that the criminal group devised and executed a plan that led to the embezzlement of ₾1,333,728 ($492,404) from the state budget.

The arrests stem from a scheme in 2023 involving the misappropriation of a significant amount of funds belonging to the Ministry of Defence, carried out by a group using their official positions and pre-arranged agreement.

“As a result of investigative actions conducted by the employees of the Anti-Corruption Agency of the State Security Service of Georgia, based on a court order, the former Deputy Minister of Defence, the former head of the Procurement Department of the Ministry, and a close relative of the then-Minister of Defence have been detained. The case concerns the fact of misappropriation of a large amount of funds belonging to the Georgian Ministry of Defence in 2023, committed by a group with prior agreement and through the abuse of official positions. The investigation has so far revealed that the criminal group devised and executed a plan through which 1,333,728 ₾ ($ 485168.42) was misappropriated from the Georgian state budget”, the Service said.

Through sham transactions and fake tax documents, the cost of the equipment was artificially inflated via multiple resales, resulting in the Ministry of Defence purchasing it at significantly above market value.

“Members of the criminal group, some of whom also held positions as Chair and Deputy Chair of the Procurement Commission, conducted the procurement process for medical equipment in a manner that effectively bypassed genuine market research. At the same time, they ensured that only businesses closely connected to them were allowed to participate in the procurement procedures for medical equipment. Moreover, the procurement process was organised in such a way that, through sham transactions facilitated by private companies and fake tax documents issued on the same day, the cost of the medical equipment was artificially inflated through multiple resales. As a result, the Georgian Ministry of Defence purchased the aforementioned medical equipment at a price significantly higher than its market value”, the statement said.

The State Security Service also found that promised pre-selected companies guaranteed victories in the procurement process, leveraging connections with Ministry officials.