Bribes, Overpriced Metals, and Fake Contracts Plague Russia’s War Machine

Russia’s defense sector has seen another high-profile arrest, with federal security agents detaining a former senior manager at AO “Kurganmashzavod,” the country’s primary infantry fighting vehicle manufacturer.

According to Defense News on August 11, the Federal Security Service (FSB) branch in the Kurgan region stated that the former head of the plant’s metals department is suspected of abusing official powers during the execution of a state defense order, leading to “grave consequences” under Part 2, Article 285.4 of the Russian Criminal Code.

Investigators allege that between 2023 and 2025, the official instructed subordinates to sign contracts exclusively with a specific metal supplier from Yekaterinburg, regardless of cost or availability from alternative manufacturers.

Law enforcement authorities estimate that the scheme resulted in more than 29 million rubles ($363,000) in losses through the purchase of overpriced metals.

Kurganmashzavod is a key producer of armored vehicles for the Russian military, including the BMP series, and plays a major role in supplying equipment for Russia’s war in Ukraine. The company has not issued a public statement regarding the arrest.

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This case follows a separate court ruling involving another senior defense figure. Former head of the Central Military District’s armored vehicle service, Major General Denis Putilov, was sentenced to eight and a half years in a strict-regime colony for accepting a large-scale bribe under Part 6, Article 290 of the Criminal Code.

Prosecutors said that in 2023 and 2024, Putilov oversaw high-value contracts for the repair and maintenance of military equipment between a state customer and a private entrepreneur, receiving a 10 million ruble ($125,377) bribe in exchange for “general patronage.”

The investigation found that the contracts were not fulfilled, causing significant financial damage to the Russian Ministry of Defense.

In addition to the prison sentence, the court stripped Putilov of his major general rank and banned him from holding administrative and managerial positions in state authorities for six years.

Earlier, a report by Serious Organized Crime & Anti-Corruption Evidence identified over 1,000 Russian government bodies and 1,200 private companies involved in illicit financing, asset seizures, and profiteering in occupied Mariupol, activities that researchers said may amount to war crimes.

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