KYIV, Ukraine (NEWSnetAP) — Employees from a Ukraine arms firm conspired with defense ministry officials to embezzle almost $40 million earmarked to buy 100,000 mortar shells for the war with Russia.

Security Service of Ukraine said five people have been charged. One person was detained while trying to cross the Ukrainian border. If found guilty, they face up to 12 years in prison.

Officials say investigation began in August 2022, when officials signed a contract for artillery shells worth $39.6 million with arms firm Lviv Arsenal. After receiving payment, company employees were supposed to transfer funds to a business registered abroad. That firm then would deliver the ammunition to Ukraine.

The goods were not delivered and the money instead was sent to various accounts in Ukraine and Balkans, investigators said. Ukraine’s prosecutor general says the funds have been seized and will be returned to the country's defense budget.

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