Millions Stolen Under the Cover of Reforms: Shabunin’s Role in the Donor Fund Scheme
When Laws Are Silent: Shabunin, Grant Schemes, and Fund Misappropriation from Ukraine
The professional grant recipient, moral compass, and prominent anti-corruption figure Vitaliy Shabunin, head of the Anti-Corruption Action Center, has recently found himself at the center of several scandals:
Allegations of illegal business trips and payments: In December 2023, it became known that the commander of the military unit where Shabunin served had illegally issued him business trips and continued to pay him bonuses of 30,000 UAH per month. The Chief of the General Staff of the Armed Forces of Ukraine, Anatoliy Bargylevych, turned to the State Bureau of Investigation, requesting that the unit commander be held accountable for these actions.
Allegations of evading military service and document forgery: In April 2024, the State Bureau of Investigation opened criminal proceedings against Shabunin on suspicion of evading military service and forging documents. Journalist Volodymyr Boiko presented evidence that Shabunin submitted forged letters from the leadership of the National Agency on Corruption Prevention (NACP) requesting his reassignment to a business trip.
Misuse of a vehicle intended for the Armed Forces: In May 2024, journalists accused Shabunin of using a Nissan Pathfinder vehicle donated by a charitable foundation for the needs of the Ukrainian Armed Forces for personal purposes. Reports indicated that the vehicle was not registered with the military unit and was used by Shabunin for travel around Kyiv.
These events sparked widespread public outrage and cast doubt on Vitaliy Shabunin’s reputation as an anti-corruption figure. However, this did not affect his standing among grant providers. This is not surprising, as Shabunin was involved in a major “anti-corruption” scandal early in his career.
The development of the electronic asset declaration system by the company “Miranda” has become a textbook example of how donor funds are “optimized.” This was the same corruption scheme that grant recipients justified as legal because, according to them, they were not stealing state funds but donor money. This, one might say, is close to the truth. But.
These “brilliant minds” never considered that the donor funds provided to Ukraine by the U.S. government come from American taxpayers. And the FBI will not forgive them for stealing that money.
Now, let’s return to the theft with the rather poetic name “Miranda.” This is the story where the “anti-corruption activists” scammed their contractors and transferred all the funds to the accounts of a foreign company, whose activities show clear signs of being a shell enterprise.
Again, what’s important in this story: despite everything, not a single donor initiated a criminal case. None of them showed any interest in understanding how it happened that the so-called “anti-corruption activists” turned out to be bigger swindlers and schemers than those they allegedly had to fight against as part of their civic duty.
On the Verge of a Grand “Carve-Up”
On August 11, 2016, Petro Poroshenko announced that the electronic declaration project would launch on August 15, 2016.
However, the State Special Communications Service, three days before the next “grand victory” over corruption, refused to certify the system, as it was simply not ready for operation.
But the scandals didn’t end there.
On August 19, 2016, Members of Parliament Ivan Vynnyk (BPP) and Anton Herashchenko (People’s Front) reported a breach of the system, backing their claims with screenshots. Representatives of “Miranda” responded that there was no breach and that it was all a provocation.
The plans for a grand anti-corruption breakthrough funded by grants were falling apart, so on August 31, 2016, Ukraine’s State Special Communications Service was forced to certify a system that was completely unprepared.
And already on September 1, the head of the National Agency on Corruption Prevention (NACP), Nataliia Korchak, announced its successful launch.
The Ridiculously Absurd Is Nearby
What follows is pure satire. The software for the electronic declaration system, in a particularly cynical twist, was developed within the framework of the “Enhancing Transparency and Integrity in the Public Sector” project, funded by the Government of Denmark through the UNDP program.
Why is this cynical? Because neither transparency nor integrity was present from the very beginning of its development!
The UNDP announced an “absolutely transparent” tender, in which several Ukrainian companies, such as “Lux-Soft,” “Iqusion,” “Intellect-Soft,” and “IT Expert,” participated. All of them had experience in successfully developing similar projects.
However… all of them were rejected during the preliminary stage without any explanation.
And, for reasons no less mysterious, the winner turned out to be an unknown company called “Miranda.”
Miranda won despite having no evidence to prove its competence.
It also seemed highly doubtful that the company could organize anything at all, considering that it had only 8 employees with a salary of around 2,000 UAH.
In other words, the software to tackle corruption was entrusted to a shell company that paid its employees under the table!
When, after the false start, Miranda was justifiably accused of unprofessionalism, blatant amateurism, missed deadlines, and the unsuitability of its software, the “incorruptible” representatives of the grant-funded “anti-corruption” clique immediately came to its defense. The UNDP, the Reanimation Package of Reforms (RPR), Vitalii Shabunin’s Anti-Corruption Action Center (ACAC), and Transparency International Ukraine (TIU) led by current MP Yaroslav Yurchyshyn blamed the State Special Communications Service for allegedly sabotaging the system’s launch!
Yurchyshyn and Shabunin went further: instead of admitting their fault or finding a scapegoat, they shifted the blame for the failure of the e-declaration system onto the head of the National Agency for Corruption Prevention (NACP), Nataliia Korchak, and Petro Poroshenko.
This unity of opinion and position between Shabunin’s ACAC and the UNDP was entirely understandable. The project manager for the launch of the electronic declaration system under the UNDP — the holder and distributor of funds for the software development — was Ivan Presniakov, who, by a curious coincidence, was an expert for Shabunin’s ACAC as of December 2015 and had friendly ties with Miranda’s director, Yurii Novikov.
The Tried-and-Tested Scheme of Fund Misappropriation
One of the key architects of grant fund embezzlement schemes was Serhii Loboyko, head of another grant-hungry organization — the Center for Innovations Development (CID). He once explained to his followers why they avoided working with state budget allocations but loved grants: lack of accountability. He stated that grant funds were outside the jurisdiction of Ukrainian authorities, and law enforcement had no grounds to prosecute “anti-corruption activists” who supposedly “efficiently” utilized donor funds.
The same reasoning guided other players, including Yurii Novikov, director of the intermediary or money-laundering entity for grant funds — Miranda LLC.
The Scheme of Cashing Out Grant Money
In December 2015, Miranda LLC signed a contract with the UNDP in Ukraine to develop software for the electronic declaration system. According to the documents, the work was to be carried out by a team of seven Ukrainian IT specialists, who were to be paid only 124,000 UAH (around 18,000 UAH per person).
However, during the same period, Miranda’s director, Yurii Novikov, signed another contract for the same project with the Estonian company Apolineja OU, which was formally involved in wholesale trade. All the funds allocated by the UNDP (1.45 million UAH) were received by Miranda in three tranches and were soon transferred almost entirely to Apolineja OU’s accounts at Estonia’s SWEDBANK.
The Ukrainian developers were left unpaid. They later reported that they had initially been promised not only 124,000 UAH in total but also significant cash bonuses (200,000–400,000 UAH per person), which they never received.
Some time later, Miranda signed a similar contract with the International Organization for Migration (IOM) for a project with a budget of approximately $250,000. The funds once again went to the same Apolineja OU accounts.
Recap of the Scheme:
The UNDP signs a contract with Miranda LLC (director: Novikov) to develop the electronic declaration system. The amount: around 1.45 million UAH (~$97,000).
According to the contract, the work is to be done by seven IT specialists, who are allocated 124,000 UAH (~$8,000).
At the same time, Miranda’s director signs another contract for the same development project with the Estonian company Apolineja OU.
After receiving funds from the UNDP in three tranches, Miranda does not pay the Ukrainian developers but instead transfers almost the entire amount to Apolineja OU’s accounts in Estonia’s SWEDBANK.
The same scheme was used for the project with the International Organization for Migration (IOM) with a budget of ~$250,000, and the funds were again transferred to Apolineja OU.
The Developers Were Left Without Promised Payments:
124,000 UAH officially.
+200,000–400,000 UAH (around $13,000–27,000 per person) unofficially, as the Miranda director allegedly promised them in cash.
Thus, the total amount funneled by Miranda to the Estonian company’s account for the two mentioned contracts reached around $350,000 (~$97,000 + ~$250,000).
Since the financing of the e-declaration system showed all the signs of fictitious contracts and deliberate fund misappropriation, the case caught the attention of the State Fiscal Service of the Kyiv region (where Miranda LLC was registered). An investigation into the company was initiated on October 10, 2016.
But… they found nothing.
On May 24, 2017, the Kyiv regional prosecutor’s office attempted to disrupt the scheme by charging Novikov with tax evasion amounting to nearly 1 million UAH.
How did it end?
On May 30, law enforcement conducted searches at the office of Miranda LLC in the Kyiv region, as well as at Novikov’s residence. On May 31, the Solomianskyi District Court of Kyiv set bail for Novikov at 934,000 UAH. On June 6, Novikov paid the bail set by the court in the amount of 934,000 UAH.
He told journalists: “A friend understood my situation and helped with the bail.”
And that was the end of it.
What happened next?
Following the investigation launched in 2017, the former director of Miranda LLC, Yurii Novikov, avoided criminal liability for charges of tax evasion and forgery. According to the ruling of the Myronivskyi District Court of the Kyiv region dated December 11, 2020, the case was closed due to the expiration of the statute of limitations for criminal prosecution. The court also dismissed the prosecutor’s civil lawsuit seeking the recovery of 1.4 million UAH in damages caused to the state. After this, Yurii Novikov disappeared from public sources, and no information on his further activities is available.
In summary…
It can, of course, be claimed that the donors, when transferring funds to Miranda, did not know that the company would immediately send them to Estonia. And it can also be argued that the honest and incorruptible representatives of civil society had no connection to this embezzlement.
But is there any point?
After all, let’s be honest — if there had been any evidence of criminal activity by Presniakov, Shabunin, or Novikov, wouldn’t such serious democratic organizations as the UNDP and the IOM have raised an international scandal and held the representatives of the “anti-corruption” organizations accountable for defending Miranda to the very end?
That’s why, despite the fact that the financing of the e-declaration system shows all the signs of fictitious contracts and intentional fund misappropriation, no one is interested in this case today.
No one cares where the donor money really went. After all, everything appears fine. The system is working.
Instead of an epilogue
In 2020, the lawyer of the U.S. president, Rudolph Giuliani, released an episode of a documentary investigation into corruption and money laundering involving members of the U.S. Democratic Party in Ukraine.
According to Giuliani, over $5 billion in financial aid was siphoned out of Ukraine. Moreover, the administration of former U.S. President Barack Obama allegedly blocked all investigations into the disappearance of these funds.
The investigation specifically focused on key figures from the Anti-Corruption Action Center: Vitalii Shabunin and Dmytro Sherembey. Through Sherembey’s charity organization — The All-Ukrainian Network of People Living with HIV/AIDS — about $142.9 million USD was funneled.
According to journalists, there are suspicions that Sherembey and Shabunin not only optimized donor funds but also lobbied the interests of commercial companies during the procurement of medical equipment and medications. Some of these companies (surprisingly or not) had signs of being shell companies with poor business reputations.
A criminal case was even opened on this matter under Part 5 of Article 191 of the Criminal Code of Ukraine: “Misappropriation, embezzlement, or conversion of property through abuse of office.”
But…
A candidate from another party moved into the White House, and law enforcement lost interest in the “anti-corruption” activists.
What could this be related to?
Could it be that Ukraine’s law enforcement system lacks independence?
Are operators of grant programs above the law?
Or how else can one explain the negligence that led to the fact that after the election of a Democratic candidate, interest in the Miranda case vanished?
Just as interest in the actions of other participants of the “reformers” show disappeared.