The HACC acquitted former head of the Main Housing and Operations Department of the Armed Forces of Ukraine Oleh Halushko, who had been charged with embezzling over UAH 20 million in a housing procurement scheme for the Ministry of Defense.

According to the prosecution, in the fall of 2018, Halushko formed the intent to embezzle budget funds on an especially large scale in connection with the procurement of housing for military personnel in Kharkiv.

The central element of the alleged scheme, according to the investigation, was the artificial inflation of the maximum price per square meter of housing. While an internal market monitoring exercise put the average market price at UAH 14,800 per sq. m., the tender documentation set the ceiling at UAH 19,000.

The relevant tender documentation was submitted for procurement procedures covering apartments on the secondary market and under shared equity terms. In November and December of that year, several tender competitions were held for the purchase of apartments in Kharkiv, with Divodor AMC LLC among the bidders — and ultimately the winner.

In total, 30 apartments were purchased in the Raiduzhnyi residential complex, with a combined area of 1,783.6 sq. m., for a total of over UAH 29 million. Acting on behalf of the Ministry of Defense, Halushko signed 30 purchase and sale agreements. The prosecution maintained that the price of each apartment was inflated, with overpayments ranging from several hundred thousand hryvnias per unit.

According to the investigation, a similar situation arose in a further competition, in which Divodor AMC LLC again emerged as the winner. An additional 30 apartments with a combined area of 1,488.4 sq. m. were purchased for over UAH 24 million. A supplementary offer from Divodor AMC LLC for two apartments with a combined area of 129.7 sq. m. was also accepted under yet another competition.  The investigation contends that these prices likewise failed to reflect actual market value.

The investigation also flagged a simplified procurement of a one-bedroom apartment through the Prozorro electronic system, asserting that competition in that procedure was merely nominal and the bids were coordinated in advance.

Overall, law enforcement characterized Halushko's conduct as a systematic scheme involving inflated per-square-meter price ceilings, sham tender competitions with predetermined winners, and purchase agreements concluded at above-market prices.

Halushko was charged with embezzling UAH 29.21 million in connection with the purchase of approximately 60 apartments for military personnel in Kharkiv.

The defense maintained that the defendant's actions were lawful and carried out within the authority delegated to him by the Ministry of Defense of Ukraine, and that the housing procurement complied with applicable legislation and established procedures. Defense counsel argued that setting a maximum price per square meter does not constitute evidence of price inflation, since the final purchase price was determined through competitive tendering, and that the prosecution failed to prove any intent to embezzle funds or cause harm to the state budget.

The charges were brought under Article 191(5) of the Criminal Code of Ukraine.

The HACC acquitted Halushko, with the panel finding no criminal offense in his conduct.

The court concluded that the audit report of the Audit Service of Ukraine was neither proper nor admissible evidence, as the prosecutor lacked the authority to initiate such an audit and a "specialist's opinion" is not recognized under the Code of Criminal Procedure as a standalone source of evidence. The court also found that the expert assessments cited by the prosecution related to the market value of specific individual apartments, while the charges rested on alleged inflation of the average per-square-meter price across the city as a whole — figures the court considered distinct and incomparable, and therefore incapable of forming the basis of a conviction.

The HACC Appeals Chamber upheld the verdict.