The Bureau of Economic Security of Ukraine (BEB) is investigating a massive scheme involving the embezzlement of state funds during the production and procurement of unmanned aerial systems (UAS) for the Armed Forces of Ukraine. According to investigators, officials from Euro Tunnels LLC colluded with the foreign company DEEP MATTER Z.O.O. and government representatives to artificially inflate the cost of components for UAVs, specifically for the well-known «Magura UA» reconnaissance and strike complexes. The total value of the defense contracts under scrutiny exceeds 724 million UAH.
The criminal proceedings (No. 72025001420000026, initiated on March 3, 2025) are being led by the Main Detective Division of the BEB under the procedural guidance of the Prosecutor General’s Office. The suspects’ actions are categorized under Part 5 of Article 191 of the Criminal Code of Ukraine (misappropriation, embezzlement, or conversion of property through abuse of official position committed on an especially large scale).
Euro Tunnels LLC, established in August 2022 and registered to proxy owners from Chernihiv (Borys Zahalskyi and formerly Svitlana Yehorova), secured two major state defense contracts. The first was signed with the State Service for Special Communications and Information Protection of Ukraine on October 11, 2023, valued at 460.8 million UAH. The second was concluded with the Defense Procurement Agency on February 20, 2024, worth 263.5 million UAH.
The investigation revealed that the profit mechanism relied on importing hardware from a controlled foreign entity, DEEP MATTER Z.O.O. (owned by Svitlana and Aleksander Kozaczuk), at highly inflated prices. Overpayments on just two specific types of components resulted in tens of millions of UAH in losses for the state.
From the BEB analytical report No. 9.3/3.3.1/1590-25 dated February 28, 2025: «The artificial price inflation for motors and flight controllers intended for Ukrainian military drones alone accounts for over 39.7 million UAH in damages.»
State analysts compared the import prices of Euro Tunnels LLC with the market rates paid by other Ukrainian enterprises during the exact same period:
Hobbywing Motors: Euro Tunnels purchased these units at prices ranging from $267.5 to $370 each. Meanwhile, other domestic defense firms imported identical motors for $109 to $112.5. This single item resulted in an overpayment of 28.7 million UAH.
CUBEPILOT HEX Flight Controllers: The company procured these for $295 to $587.73 per unit, compared to the standard market import price of $165.56 to $250.47. The resulting loss is estimated at 11 million UAH.
As part of the military drone fraud investigation, BEB detectives executed authorized search warrants on September 9, 2025. The raids took place at the Kyiv office of Euro Tunnels LLC, located on the 10th floor of the Horizon Office Towers business center on Shovkovychna Street, as well as the private residence of the former commercial director, who is identified as the actual beneficial owner of the company.
Law enforcement officials seized technical specifications and testing forms for the «MAGURA UA», «Kolyada K4», and «ARESA A1» unmanned aerial systems, along with testing logs, official correspondence with military structures, and corporate registration adjustment documents. All seized materials have been officially logged as physical evidence, and a comprehensive forensic computer examination has been ordered by the court. The investigation is ongoing.