Russian Defense Ministry official arrested on fraud charges for alleged involvement in lumber price inflation scheme

A Moscow court has arrested Vladimir Shishov, the deputy director of the Russian Defense Ministry’s military property department, as well as Dmitry Levchenko, the CEO of a timber company called IFK RNGS Capital, on charges of large-scale fraud, the newspaper Kommersant reported on Thursday.

According to investigators, the men greatly inflated the cost of lumber materials provided to the Defense Ministry as part of a 60-million-ruble ($644,000) contract, resulting in an estimated loss of approximately 27 million rubles ($290,000) for the ministry. The military uses the materials to build trenches and bunkers.

The total value of the various contracts between IFK RNGS Capital and the Defense Ministry could potentially exceed 1 billion rubles ($10.7 million), according to Kommersant. Investigators are reviewing the contracts not currently included in the case.

Shishov and Levchenko have not pleaded guilty to the charges.