MOSCOW, February 3 (RIA Novosti) – Russia's Audit Chamber has exposed a fraud scheme in the construction of prison facilities that resulted in undue benefits to the Federal Penitentiary Service (FSIN).
FSIN signed more than half of its contracts – worth 7.1 billion rubles ($202 million) – with private firms in 2010-2012, in violation of Russian tender laws, the public finance watchdog said.
The probe found that during that period, FSIN construction agencies acted as general contractors and received undue financial benefits totaling 250.5 million rubles ($7 million) in federal budget funds.
The Audit Chamber also found that the items made at Russian correctional facilities were often sold internally at a higher price than their average cost for external consumers.
Russian prison authorities were caught out in another fraud scheme uncovered in March last year involving the purchase of electronic tracking devices for tagging convicts. Instead of holding a tender, FSIN officials signed contracts beneficial to an affiliated firm, which cost the state some $32 million, investigators said.
An investigation also revealed that the tracking devices were not linked to Glonass, Russia’s answer to the US Global Positioning System, effectively rendering them useless.