The Prosecutor’s Office of Georgia has initiated criminal proceedings against 9 individuals, including 4 individuals who have been arrested, for the embezzlement of a large amount of funds allocated for the construction of 16 kindergartens for 1,550 children in various municipalities, abuse of official position, legalization of illegal income by an organized group, official negligence, and the production and use of forged documents.
An investigation conducted by the Department for Combating Corruption Crimes of the Prosecutor General’s Office of Georgia established that in 2023-2025, within the framework of 9 tenders, contracts were signed between the LEPL “Georgian Municipal Development Fund” and the construction company LLC “Mshengroup” for the construction/rehabilitation of 16 kindergartens for a total of 1,550 children in the municipalities of Khelvachauri, Keda, Ninotsminda, Tsalenjikha, Khobi, Lagodekhi, and Kaspi.
A total of 18,648,018 GEL was transferred to LLC “Mshengroup” for the implementation of the above-mentioned works, of which 4,762,587 GEL, in accordance with a pre-developed plan, was appropriated by members of an organized group, thereby causing a large amount of property damage to the state. During the same period, members of the organized group jointly developed and implemented a criminal plan to legalize illegally obtained income, according to which the misappropriated funds were transferred to the bank accounts of the members of the organized group for various purposes, both personal and to other companies founded by them and to persons close to them. As a result of these actions, dozens of real estate companies worth more than 4 million GEL were purchased. Subsequently, part of the aforementioned property was transferred to the names of various private and legal entities for concealment.
The investigation also established that individual managers of the LEPL “Georgian Municipal Development Fund” improperly performed their official duties due to their negligent attitude, which led to serious consequences. In particular, LLC “Mshengroup” unreasonably requested money in writing 15 times as an advance for the purpose of carrying out rehabilitation and construction works. The officials were aware that LLC “Mshengrupp” was not properly fulfilling any of the obligations stipulated in the tender, and instead of acting in accordance with the rules established by law and taking appropriate measures, they were indifferent to their duties and each time issued permission to transfer the advance payment in full to the company, which ultimately led to serious consequences. In particular, the construction and rehabilitation works of 4 out of 16 kindergartens did not even begin, and the rest of the works were carried out incompletely, which is why none of the 16 kindergartens has been handed over to date.
The investigation also established that the engineering supervision of the above-mentioned works was assigned to a private expert company, which was obliged to carry out a quantitative and qualitative inspection of the works performed. Although the employees of the supervisory company were aware that, in some cases, the data reflected in the acts of work performed did not correspond to reality, they nevertheless confirmed the said data at the request of the manager of LLC “Mshengrupp”, as a result of which the members of the criminal group illegally acquired state funds.
The leaders of the construction company and members of the organized group were charged with abuse of office, embezzlement of a large amount of state funds, legalization of illegal income, and production and use of a forged document, which provides for up to 12 years of imprisonment as a form and measure of punishment.
The former leaders of LEPL “Georgian Municipal Development Fund” were charged with official negligence, which provides for up to 5 years of imprisonment as a form and measure of punishment.
The supervisory experts of a private company were charged with making a false document, which is punishable by up to 6 years in prison.
The assets acquired for the purpose of legalizing illegal income have been seized, and the investigation into the case is ongoing to identify other individuals or public officials involved in the crime.
The Prosecutor’s Office of Georgia continues its relentless fight against corruption and pursues a strict criminal justice policy in cases of this type.
