Fourth Suspect Arrested in Defense Fraud Case

MOSCOW, January 16 (RIA Novosti) – A Moscow court has ordered the arrest of another senior Defense Ministry official in connection with a massive fraud probe at a state defense firm, the latest in a series of top managers to be held over the case.

The head of the ministry’s economic directorate, Nikolai Ryabykh, was placed under two-month arrest on Tuesday, the Moscow District Khamovnichesky Court confirmed on Wednesday.

“Ryabykh is suspected of mass fraud. The investigators considered that he could impede the investigation or flee,” court spokeswoman Darya Lyakh told RAPSI news agency.

Ryabykh’s arrest is part of a probe into alleged fraud involving state assets worth at least $130 million at Oboronservis, a property management firm controlled by the Defense Ministry. The investigation, involving at least a dozen separate instances of fraud, led to the sacking of Defense Minister Anatoly Serdyukov in November.

Ryabykh’s directorate signed a state contract with a company intentionally overpricing its services by up to 299 million rubles (just under $10 million), according to the investigation. He was questioned by investigators on Monday, Kommersant reported on Wednesday.

Last week, Serdyukov was summoned to the Investigative Committee, but refused to answer questions over the case and only submitted a written statement.

Three other people were arrested last year over the case, including the former head of the Defense Ministry’s property department Yevgenia Vasilyeva, and former Oboronservis executives Yekaterina Smetanova and her husband Maxim Zakutailo.

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