Police Suspect Fraud in North Caucasus Resort Company

MOSCOW, May 8 (RIA Novosti) – Russian police have opened a criminal case into the alleged embezzlement of 275.3 million rubles ($8.8 million) in state funds carried out by unknown managers of the Northern Caucasus Resorts company, the Interior Ministry said on Wednesday.

The investigators suspect the company’s management organized the fraud in 2011 by hiring a subsidiary company to design infrastructure for the resort hub.

According to the statement released on Wednesday, the Northern Caucasus Resorts, a state-run company that manages the ambitious project of creating holiday resorts in the turbulent region, could have performed all the work itself, but instead held a closed tender for affiliated firms and overpriced the order.

The new case is a new development in a string of probes targeting the Northern Caucasus Resorts.

Last month, an investigation was opened into alleged spending violations by its former chairman of the board, Akhmed Bilalov, who is also the former vice-president of Russia’s Olympic Committee. Bilalov was accused of spending more than $97,000 of the company’s funds on luxury foreign travel.

Bilalov was removed from the Olympic Committee in February after President Vladimir Putin criticized massive construction delays and cost overruns during a ramp construction for the 2014 Sochi Olympics.

The official fled to Germany with his brother, where he told reporters that he had been poisoned with mercury. The police didn’t specify on Wednesday whether Bilalov was also suspected of the newly alleged fraud.


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