Kremlin chambers and Sovremennik Theater appear in embezzlement case at Putin’s Novo-Ogaryovo house
According to the defendant in the case, the contractors of the Federal Guard Service and the Ministry of Culture had been stealing since 2007.
Former deputy director of Klimat Prof, Boris Maltsev, accused of embezzling 1.5 billion rubles ($22.8m) for the construction of the presidential residence in Novo-Ogaryovo, told investigators that the management of BaltStroy (owned by billionaire Dmitry Mikhalchenko) and associated businessmen had been stealing budget funds allocated for construction and restoration of state-protected buildings since at least 2007, RBC reports.
According to Maltsev, money was stolen at least at 17 sites with mainly the Federal Guard Service (FSO) and the Ministry of Culture as customers. Among the buildings the businessman listed were the Grand Kremlin Palace, Kremlin’s Faceted Chamber, Konstantinovsky Palace in Strelna, Bocharov Ruchei Residence, Tchaikovsky’s Conservatory in Moscow, Sovremennik Theater, and others. The embezzlements were committed through overstating the prices for works and materials; the subcontractors were forced to pay kickbacks of up to 50% of the contract amount to BaltStroy, Maltsev said.
In December 2016, three months before the first arrests in the Novo-Ogaryovo case, Maltsev had been questioned four times as a witness. He was working at Klimat Prof in 2007, when a BaltStroy top manager, Dmitry Torchinsky, made an offer to the Klimat Prof head, Sergei Perevalov - to equip Konstantinovsky Palace’s press center with engineering systems after the G8 summit had been held there. The building was under the control of the Office of Presidential Affairs.
BaltStroy and Klimat Prof agreed on a kickback of 20% of the contract price in favor of Torchinsky. Klimat Prof performed the work quickly and efficiently, according to Maltsev, so the company got offers at other sites with 25–30% rollbacks. According to Maltsev, Torchinsky referred to the kickbacks as "Funds Return".
The same scheme was used in 2008, when Klimat Prof repaired the engineering systems in the presidential residence Bocharov Ruchei. The contract was valued at 55–60 million rubles ($913.300), and the kickback or "Funds Return" amount was about 30%. After that, BaltStroy and Klimat Prof have executed about two dozen contracts for works at the facilities of the state’s top officials and cultural institutions, including the Kremlin’s Faceted Chamber, Gorki-9 residence, Sochi’s Riviera Park and Moscow City Council.
Klimat Prof had to overprice the equipment they purchased to allow for the BaltStroy rollback. They added from 200% to 1000% of extra costs; all that was done in coordination with BaltStroy. Klmpat Prof produced fake price lists and invoices to add the inflated prices to the reports, said Maltsev.
According to the entrepreneur, if it had to, the company entered into price fixings with other dealers of imported equipment. So, Mitsubishi Electric or Carrier could send in commercial offers with inflated prices by agreement with Klimat Prof.
After that, BaltStroy concluded a contract with Klimat Prof for installation of equipment, as well as a supply contract with a front company. The other contract was fictitious: the funds were returned to BaltStroy as kickbacks. The “Returned Funds” could sometimes be wired as fees for "consulting services" that the customer had provided to the contractor. For example, a “consultation” on Sparrow Hills works cost 200 million rubles ($3.000.000), follows from Maltsev’s testimony.
For some facilities, the rollback amounted to half the contract price. Klimat Prof paid 342.9 million rubles ($5.2m) to BaltStroy for the works at 5, Red Square while the contract value was 757 million rubles ($11.5m). The real cost of the equipment amounted to 414.5 million rubles. The Sparrow Hills contract featured 950.000.000 rubles, 360.000.000 of which were the kickback.
Kickbacks were paid even for relatively inexpensive contracts. For instance, reconstruction of the attic of Gorki-9’s guest house that made it residential cost 6.5–7 million rubles, while the rollback amounted to about 1 million rubles.
According to Maltsev interrogation file, he came to the Investigative Committee in December 2016, having realized he had been part of a “scheme of embezzlement of budget funds allocated for the construction of government facilities”. The BaltStroy owner, Dmitry Mikhalchenko, and the company’s director, Dmitry Sergeev, had already been in custody then, for smuggling alcohol and stealing at Culture Ministry facilities, respectively.
In July 2018, Maltsev was charged with embezzlement (Art. 160). He managed to avoid the charges of the creation of a criminal community (Art. 210) brought against Mikhalchenko and Sergeev.
It is noted that Maltsev’s testimony is different from the investigators’ theory, which holds that Andrei Kaminov, director of the FSO-controlled FSUE Ateks created the criminal community in 2011. According to Kaminov’s lawyer, Oleg Klimenko, BaltStroy and Klimat Prof employees had been operating at various sites long before 2011, so neither Mikhalchenko nor FSO officers had anything to do with them. Klimenko states that the investigation only took into account the parts of Maltsev testimony that allowed to prosecute certain people.
Kupavnenskaya criminal group, known for a series of bloody crimes at the beginning of the decade, has been completely eliminated. The last of its active members who remained at large has been detained in Moscow.