Russia’s Penitentiary Service Reveals $327 mln Fraud

MOSCOW, February 28 (RIA Novosti) – Russia’s Federal Penitentiary Service (FCIN) said on Thursday it had uncovered fraudulent financial operations inside the organization which have cost it over 10 billion rubles (some $327 mln).

“During the course of an inspection of documents, financial violations were discovered totaling over 10.1 billion rubles,” said the FCIN’s head, Gennady Korniyenko, but did not elaborate.

The announcement came just weeks after investigators probed a case in which FCIN had purchased electronic bracelets for people under house arrest, for vastly inflated sums. An investigation also revealed that the bracelets were not linked to GLONASS, Russia’s answer to the US Global Positioning System, or GPS, and were effectively useless.

Investigators said the scheme had cost the state some $32 mln and that the bracelets had been ordered by the FCIN’s former head, Alexander Reimer, and his deputy.

The probe into the case was opened after two FCIN employees were detained on suspicion of extorting $2.6 million from a businessman in connection with the purchase of the bracelets.

The revelations come to light during a much-vaunted Kremlin anti-corruption campaign, which has reached as high as ministerial level, with the resignation of the former Defense Minister last November.

Russia consistently hovers around 150th place in Berlin-based NGO Transparency International’s corruption index.


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