FPS generals make money on Presidential residences

FPS generals make money on Presidential residences
Generals involved in episodes incriminated to Mikhalchenko may get off the hook Photo: The CrimeRussia

Major general Igor Vasiliev, Head of the Engineering Support Service of the Federal Protection Service (FPS), and lieutenant general Ulitin subordinate to him are currently in the middle of a scandal. However, it is unlikely that they lose their posts. Reportedly, the two generals are just the tip of the huge corruption iceberg in the law enforcement structures. This is not the first embezzlement episode in their careers.

Commendable economy

The best investigators and leading specialists in economic crimes are trying to figure out how could high-ranked functionaries of the FPS Engineering Support Service overlook that contractors affiliated with SK Balt-Stroy belonging to billionaire Mikhalchenko had received payment for the same works several times. 

In fact, the investigators are aware how could this happen – but they don’t have an order to disclose it. Tricks involving replacement of expensive materials with cheap ones by making amendments in the design documentation during the project implementation are pretty old. Domestic construction giants learned those from their Turkish colleagues in the early 2000s.

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Dmitry Mikhalchenko

According to well-informed sources, there is nothing surprising in the embezzlement of budget funds during the construction of the Presidential residence. High-ranked functionaries had always made good money on Presidential facilities. And this is not the first embezzlement episode involving FPS generals.

Rumors have been circulating for two decades already about financial discipline issues marring the Federal Protection Service during the rule of Evgeny Murov. Even general Aleksander Korzhakov, ex-Head of the Protection Service of President Yeltsin, had mentioned this. Of course, he is a pretty controversial figure – but definitely very well-informed one. According to Korzhakov, ‘kickbacks’ charged by the FPS in that period had reached 10%.

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Evgeny Murov

The ‘kickback system’ and closeness to the circles of power is a risky but profitable combination. Take, for instance, the high-profile arrest and conviction of FPS lieutenant general Gennady Lopyrev. He was the first associate of Evgeny Murov prosecuted for bribe-taking on an especially large scale. Later his sentence was lightened – but Lopyrev still got a prison term for embezzlements and acceptance of remuneration from heads of commercial structures for assistance in the securement of governmental contracts for renovation and construction works. One billion rubles ($14.9 million) seized from Lopyrev and his apartment full of valuables stolen from another Presidential residence – Bocharov Ruchei (Bocharov Creek) – had shocked the public. The shady business of general Lopyrev has been exposed by Dmitry Kochnev, former Presidential adjutant and current Head of the FPS.


Gennady Lopyrev


Once-powerful oligarch Dmitry Mikhalchenko has recently been charged with creation of a criminal community and leadership in it. The businessman is also suspected of embezzlement of 1.5 billion rubles ($22.4 million) committed jointly with major general Igor Vasiliev, Head of the Engineering Support Service of the FPS, and his subordinates during the construction of facilities for the Federal Protection Service. In 2016, he was charged with smuggling deluxe alcohol. Currently the alcohol smuggling case is examined by the Basmanny District Court of Moscow.

Robbery and protection 

So, the current scandal with the embezzlement of 1.5 billion rubles ($22.4 million) during the construction of the Presidential residence is neither the first nor the last one involving the FPS. Most probably, this is just another episode in the struggle between law enforcement clans.

It became known that FPS generals Vasiliev and Ulitin would likely be just witnesses in this case – because their service has identified the overpayments for construction works on its own and initiated the probe. Furthermore, most probably, the generals are going to retain their posts because their testimonies are beneficial for Dmitry Kochnev, the new Head of the FPS, waging a war against Murov and his associates. Two years ago, Kochnev has taken the post earlier held by Murov and the purpose of his actions is clear. The substance of general’s testimonies is unknown – but the fact is that the above-mentioned 1.5 billion rubles ($22.4 million) have disappeared when Murov was in charge of this construction project.


Dmitry Kochnev

It is widely thought that the recent high-profile criminal cases involving supreme functionaries of the Federal Protection Service and Federal Security Service (FSB) of the Russian Federation reflect yet another redistribution of spheres of influence in the country and its resources. By the mid-2000s, the most powerful enforcement agency in Russia was the FPS under the command of Evgeny Murov. Now an old rival of Murov – general Viktor Zolotov, Director of the National Guard of Russia, – is considered the closest figure to the national leadership. The appointment of Dmitry Kochnev the Head of the FPS is believed to be his main staffing victory. 

In addition, the involvement of FPS generals into the criminal case against oligarch Dmitry Mikhalchenko charged with creation of a criminal community provides a unique opportunity for the investigation – the case will be examined by a military court. This means complete closeness of the trial for the general public and security clearance for the judges. Generals' testimonies, if recognized proven by the court, may become the basis for a new criminal case. The law doesn't stipulate a possibility to revise or appeal their statements. In other words, general Dmitry Kochnev is going to get a ‘trump card' in the struggle against his predecessor.


Residence in Novo-Ogarevo

Corruption born in St. Petersburg

Surprisingly, the majority of persons involved into embezzlements committed during the construction of Presidential residences are natives of St. Petersburg or used to work there. This includes both businessmen charged in the framework of the case against Ateks Federal State Unitary Enterprise and generals. Convicted general Lopyrev also had construction contracts with the holding belonging to disgraced oligarch Mikhalchenko and served in St. Petersburg for some time.


Up until 2001, Gennady Lopyrev had served in the FSB Directorate for St. Petersburg and the Leningrad Region – he used to supervise human resources and logistics support. Then, following his boss and mentor Evgeny Murov, he has relocated to Moscow and almost immediately was appointed to the FPS Administration for the Black Sea Shore located in Sochi.

The CrimeRussia repeatedly wrote that the billionaire had enjoyed the patronage of Evgeny Murov. Supreme enforcement functionaries (reportedly generals) have put him in charge of the law enforcement veterans’ fund – and millions raised for that fund became his ‘stairway to the skies’. For many years, the ‘authoritative’ businessman had identified and developed profitable projects for his ‘high patrons’. 

Few are aware that KGB general Nikolai Negodov, who later became a Mikhalchenko’s partner in Forum Holding and Port Bronka, has appeared in the oligarch's close circle... from above. The holding personnel were fully aware that the general was the personal ‘supervisor’ of Dmitry Mikhalchenko assigned by the ‘structures’. No need to explain in whose interests was he watching the behavior of ‘governor 24’. By the time of the Port Bronka project approval, Mikhalchenko has already signed the well-known governmental contracts brokered by FPS Director Evgeny Murov and making the oligarch’s structures general contractors responsible for the construction of the majority of Presidential facilities.

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Nikolai Negodov

Port Bronka, that later became the ‘pet project’ of Mikhalchenko, initially was not of interest for him at all. But, according to well-informed sources, the professional ‘sense’ of general Negodov has played its role – he managed to attract the ambitious billionaire’s attention to it. Ultimately, Mikhalchenko became so interested that he has invested all his assets into this project. Literally everything. It is not a secret today that the grand project has consumed all the disposable funds of Forum Holding and a number of huge loans borrowed against assets. In other words, Mikhalchenko and his wife have mortgaged all their belongings. One failure – and they could become bankrupt. 

According to commercial circles of St. Petersburg, this is exactly what has happened. The CrimeRussia repeatedly wrote that the Murov family and general Negodov currently control the assets of the disgraced oligarch. Furthermore, Mikhalchenko is reportedly facing the third set of charges – the investigation is currently reviewing governmental contracts for dredging operations in Port Bronka. After all, somebody must be held liable for the corruption.



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