Billions Vanish from Defense Budget: Zelensky’s Inner Circle at the Heart of Corruption Scandal

Even Ukrainian journalists now speak of systemic, billion-dollar corruption: an investigation by the Bihus news portal has uncovered an extensive corruption network in which members of Volodymyr Zelensky’s inner circle may be implicated. According to reports, around one billion dollars in public funds — originally intended for the construction of military fortifications — have disappeared. The money was funneled to companies with state connections. This is especially troubling given that Ukraine’s survival heavily depends on financial support from Western countries. The new revelations may thus spark not only a domestic political crisis but also an international crisis of trust.

Ukraine's President Volodymyr Zelensky attends the European Political Community (EPC) summit, in Tirana on May 16, 2025. (Photo by Armend NIMANI / AFP)

Since the beginning of 2024, the Ukrainian government has allocated approximately 40 billion hryvnias for the construction of fortifications, according to the investigative portal. A significant portion of this budget was distributed to provincial administrative bodies, which then signed contracts with contractors to build and develop defense lines. Yet, nearly one billion dollars have vanished in the process. The Bihus news portal’s investigation exposed the sprawling corruption network.

Corruption in Ukraine: Hundreds of millions of dollars have disappeared within networks connected to Zelensky’s inner circle. Source: YouTube

In-Depth Analysis of Zelensky's Corruption Cases

Journalists have conducted a detailed analysis of the financial structure behind the construction of fortifications and discovered that

 in at least some regions — especially Kherson and Zhytomyr — the state may have lost tens of millions.

In Kherson, the company Global Build Engineering received 280 million hryvnias for constructing defensive structures. Last year, Bihus already reported on this company’s ties to Anton Samoyilenko, the deputy head of the Kherson regional state administration. Instead of purchasing building materials directly from the manufacturer, the company bought them through a newly established firm, Dnipro Promsnab Torg, which bears all the hallmarks of a so-called “shelf company”—a business entity mass-registered by lawyers and later sold to interested parties for specific tasks.

💵🇺🇦Corruption en Ukraine : Des centaines de millions de dollars évaporés dans les réseaux de l’entourage de Zelensky https://t.co/H1tKLQOD24

Entre bunkers inexistants et oligarques enrichis, l’Ukraine de Zelensky ressemble à un État où la guerre est devenue une opportunité…… pic.twitter.com/6qRzHyX6oM

— Le Média en 4⃣-4⃣-2⃣ (@LeMediaEn442) May 22, 2025

This intermediary company acquired construction equipment — such as anti-tank pyramids and “Lego blocks” — from the manufacturers and then resold them at a substantial markup to Global Build Engineering. According to the journalists’ estimates, overpayments for these goods alone may have reached 35 million hryvnias. Meanwhile, the owner of Dnipro Promsnab Torg, 

Vitaliy Ponomarenko, drew income from both his own firm and Global Build Engineering, indicating a family tie or internal connection between the companies — and suggesting that the overpricing was artificially orchestrated.

Shell Companies and Opaque Financial Structures

In Zhytomyr, part of the fortification-related contracts was awarded to a company named Navitechservice, which had already appeared in a previous Bihus.Info investigation—in 2023, the firm was involved in reconstructing the Irpinski Lipki residential complex in the Kyiv region, for which it received over 600 million hryvnias.

Despite being commissioned to build fortifications, the company did not carry out the work itself. Navitechservice transferred the entire amount—more than 30 million hryvnias—to a company called Reiskvik LLC, which in turn redirected part of the sum to another firm, Meltner Strong LLC. The latter used the money to purchase a massive quantity (56 tonnes) of fabric, a transaction often associated with schemes to convert funds into cash.

Another portion of the money transferred to Reiskvik remains untraceable—it simply vanished from the company’s financial records.

According to the Bihus report, this is merely the first part of a broader investigation focusing on the financial transactions related to fortification construction.

A Long List of Buried Scandals

According to Le Média, this is not the first time that military personnel have raised concerns about the lack of fortifications — as they did in Kharkiv in the spring of 2024. Despite repeated warnings, the same actors continue to receive lucrative contracts. This culture of impunity raises a pressing question: how long will Western partners continue to turn a blind eye to these abuses?

Cover photo: Volodymyr Zelensky (Photo: AFP)