Gun Firm Ex-CEO Denied Bail in $1 Mln Fraud

MOSCOW, April 12 (RIA Novosti) – A Moscow district court on Friday denied bail to the former CEO of small-arms and light-weapons manufacturer Izhevsk Mechanical Works (Izhmash), who has been charged with a 35 million-ruble ($1.1 million) fraud, the RAPSI legal news agency reported.

A judge at the Tverskoi District Court refused to release Vladimir Grodetsky, 62, on a 5 million-ruble bail and ordered him to remain in custody until June 10.

Grodetsky, who was dismissed from his post as Izhmash CEO in May 2011, was detained on suspicion of fraud, the Russian Interior Ministry said on Wednesday.

Investigators allege that in 2007, Grodetsky conspired with the management of the Sarapulsk electronics plant to commit fraud.

The Interior Ministry said on Thursday it was retracting its earlier assertion that the amounts involved totaled 5 billion rubles (about $160 million).

Grodetsky faces up to 10 years in jail if convicted.

Russia’s defense sector has been rocked over the past few months by a string of corruption scandals that led to the sacking in November of Defense Minister Anatoly Serdyukov.

Several people employed by the Oboronservis defense property services company were arrested late last year on suspicion of fraud totaling over 13 billion rubles ($430 million) involving the illegal sale of ministry property.

The Russian Federal Defense Contracts Service said last month that about 1,500 violations and infractions were uncovered in state defense spending in 2012, involving over 16 billion rubles ($533 million). Over 2 billion rubles was returned to state coffers and over 3.5 billion rubles’ worth of damage was averted last year, the service said.


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