Police Carry Out Searches in Space Firm Fraud Case

MOSCOW, February 22 (RIA Novosti) – Police have conducted searches as part of an investigation into alleged fraud at a satellite communications company, the Interior Ministry’s Moscow branch said on Friday, but did not give further details.

Former executives of the Gonets company, which is part of the federal Glonass satnav program, are suspected of abuse of office and misusing funds, the ministry said

Investigators suspect former Gonets managers paid over 9.5 million rubles (about $300,000) under contracts that were never implemented, the ministry said.

Earlier media reports said Gonets’ former chief Alexander Galkevich, who stepped down in 2011, was detained on suspicion of embezzling 350 million rubles when buying satellite system components.

Gonets current president Dmitry Bakanov said on Friday investigators are not looking into the company’s current management at present.

“There has been no evidence [of abuse] under the new leadership,” Bakanov said, adding there have been comprehensive checks at all levels.

In November the chief designer of Russia’s controversial Glonass satellite navigation system, Yury Urlichich, was fired from his job.


Russia’s rival to GPS, Glonass was the center of a fraud allegation last year when with the Interior Ministry accusing unnamed Glonass officials of embezzling 6.5 billion rubles ($200 million) of the program’s funds. The probe into Glonass was backed at the time by the head of the Kremlin administration, Sergei Ivanov, an ex-defense minister and rumored ally of Deputy Prime Minister Dmitry Rogozin, who heads up Russia’s arms industry, who said the investigation into Glonass-related fraud had been ongoing since 2010.


The Glonass program has been in the works since the 1970s, but underwent a radical revamp in 2001. The 24 satellites comprising the system had been put into orbit by 2010, though only after several costly malfunctions and launch failures by carrier rockets. The program has cost 140 billion rubles ($4.4 billion) to implement to date, and its budget for 2012-2020 stands at a further 326 billion rubles ($10 billion).


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