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Russian Defense Company under investigation over property scam

25 October 2012 08:13 (UTC +04:00)

Baku â€“ APA. Russian defense sector staff are under investigation for selling off eight properties at below market value, Investigative Committee spokesman Vladimir Markin told journalists on Thursday, RIA Novosti reported.

â€œThe State design institute, comprising a building complex in downtown Moscow, was sold for 282 million rubles (nearly $9 million) less than its market value [â€¦]. Another three buildings in central Moscow, and a land plot, were sold for just over 700 million rubles (just over $22 million), at least 200 million rubles (over $6 million) below their market value,â€ Markin said.

Five criminal cases have been opened in connection with this affair, which investigators estimate to have caused losses of over 3 billion rubles (over $95 million).

"The famous Soyuz hotel and an adjacent land plot in the capital were sold for just 600 million rubles (about $19 million), or one and a half times below their market value," he added.

The investigation has also uncovered instances of real estate and land plots in Russiaâ€™s Krasnodar Territory being inappropriately removed from public use, rented out, developed and sold for alleged personal gain, the spokesman said.

Defense agency officials are suspected of selecting attractive sites, investing public funds in them, and then selling them off at below market value.

The Investigative Committee announced earlier that it was searching properties owned by the defense ministryâ€™s building services holding company Oboronservis, and by a former Defense Ministry property head, in connection with an ongoing investigation into a real estate scam.

Defense Minister Anatoly Serdyukov has been informed of the investigation and arrived at one of the locations being searched, law enforcement sources say.

The Defense Ministry has so far not commented on these developments.