Russian law enforcement authorities announced on Thursday the arrest of Denis Mikhailov, the CEO of cleaning supplies company Lenbytkhim, on suspicion of defrauding the Russian Defense Ministry through government contracts. He is accused of misappropriating over 20 million rubles from a contract valued at 115 million rubles with Voentorg, the military’s clothing and food supplier.
According to the Investigative Committee, Mikhailov inflated prices for raw materials deliberately. He faces charges of large-scale fraud, with a maximum penalty of 10 years in prison. This arrest follows the recent arrest of Voentorg CEO Vladimir Pavlov on similar charges of defrauding the government with overpriced toiletry kits.
Authorities are also investigating potential involvement of Voentorg and the Russian Defense Ministry’s resources department in the case. Additionally, they are looking into the legality of Mikhailov’s properties and vehicles in St. Petersburg and Turkey. Voentorg’s parent company was sanctioned by the EU in June 2022 after Russia’s invasion of Ukraine.
These arrests are part of a larger purge within the military, which also saw the dismissal of Russia’s defense minister Sergei Shoigu. The Moscow Times, an independent journalism outlet, faces challenges from the Russian government and seeks support to continue its work.