NYT investigation: Ukraine lost about $1.2 billion in 2024 to fraud and waste in weapons procurement

Why it matters

The audits put a concrete figure on losses in Ukraine's wartime weapons procurement — roughly $1.2 billion in a single year — and tie that figure to specific, documented failures: defective munitions delivered to the front, contracts awarded at hundreds of millions of dollars over lower-priced bids, and continued state orders to companies under criminal investigation or run by executives already arrested for corruption. The scale matters because procurement budgets directly determine what reaches soldiers at the front, and the pattern matters because it points to systemic weaknesses in contractor vetting and tender oversight at a moment when the Defense Procurement Agency is making some of the country's largest spending decisions.

What happened

The New York Times published an investigation built on classified internal Ukrainian government audits of weapons procurement in 2024 and 2025. According to the audits, Ukraine lost approximately $1.2 billion in 2024 through fraud, waste and mismanagement, and auditors flagged the absence of proper checks on contractors' ability to fulfill contracts and a repeated pattern of contracts going to entities with histories of non-performance. Eighteen companies that signed new agreements had failed to deliver on previous contracts, and six of them had not fulfilled a single contract. Seven of Ukraine's ten leading military contractors received new orders despite open criminal investigations into fraud, non-performance of earlier agreements, or the arrest of executives on corruption charges.

The investigation also walked through individual cases. Bypassing cheaper bids in tendering cost about $126 million. In a 2024 tender for rockets, three companies offered $4,200, $4,600 and $5,100 per unit for an identical product manufactured by the same company in Turkey; the Defense Procurement Agency chose the most expensive offer, from a subsidiary of Czechoslovak Group, producing an overpayment of roughly $130 million. The Pavlohrad Chemical Plant, led by Leonid Shyman, supplied 233,000 unusable mortar shells, many with defective detonators or propellant charges; auditors found that the plant initially reported lacking capacity to fulfill the order, then changed its production data without explanation, after which the contract was signed. Despite the defective deliveries, the plant received additional orders, including a contract to supply nearly all 122mm artillery shells for the military in 2025. Shyman was arrested and sentenced to five years in prison in a separate case involving a corruption scheme for selling explosives at inflated prices; his lawyer said he does not consider himself guilty and plans to appeal.

In another case, the Defense Procurement Agency in 2024 sought Soviet-pattern missiles from a Serbian manufacturer — complicated by Serbia's friendly relations with Russia — and contracted the Ukrainian state company Spetstekhnoexport despite its history of unfulfilled contracts. Auditors concluded that Spetstekhnoexport lacked the required Serbian export license; a guarantee letter from Ukrainian military intelligence was used instead, the legal basis of which auditors questioned. Spetstekhnoexport engaged the American company Regulus Global as a subcontractor; then-Defense Minister Rustem Umerov wanted intermediaries removed and proposed that Regulus work directly with the state procurement agency. At least $100 million in prepayment tied to one failed deal remains disputed between the companies. It was unclear whether the Defense Procurement Agency had responded to the audit findings.

Background

The Defense Procurement Agency is the Ukrainian state body responsible for contracting weapons and military goods. Serbia maintains friendly relations with Russia, which complicates direct Ukrainian purchases of Soviet-pattern munitions from Serbian manufacturers. Czechoslovak Group is a Czech-registered defense group whose subsidiary won the rocket tender described in the investigation.