Sacked Ukrainian cyber chief released on bail amid corruption probe

Ukraine's former cybersecurity chief was released from detention on Friday on $700,000 bail, according to Ukraine’s anti-corruption nonprofit.

Yurii Shchyhol, the ex-head of Ukraine’s State Service for Special Communications and Information Protection (SSSCIP) was detained earlier this week as part of an investigation into an embezzlement scheme.

After leaving the pretrial detention center, Shchyhol will have to comply with a number of rules like not talking to witnesses or other suspects, giving up his passport for international travel, and wearing an electronic bracelet, said the Ukrainian Anti-Corruption Action Center.

Shchyhol and his former deputy, Viktor Zhora, were dismissed earlier this week amid an investigation into a corruption scandal involving the procurement of software for the state agency.

The court took Shchyhol into custody on Thursday, while Zhora is still waiting for a verdict. In a Facebook post, Zhora said that there’s a chance that he could spend this weekend in a pre-trial detention center.

Prosecutors said on Wednesday that during the search of Shchyhol's phone, investigators discovered a cryptocurrency wallet containing $1.5 million in bitcoin and Tether.

Shchyhol did not provide any comments on the accusations, while Zhora dismissed them as fake.

Both Shchyhol and Zhora said previously that they were confident they could prove their innocence.

In the international cyber community, Zhora and Shchyhol are among the most recognizable Ukrainian state officials. As part of their work at SSSCIP, they were responsible for the cybersecurity of state information resources and critical infrastructure.

Zhora frequently talked to journalists from international media and attended various security events. He recently delivered a keynote speech at the Cyberwarcon cybersecurity conference in Washington, D.C., and was interviewed onstage at the Black Hat event in Las Vegas.

New details of the scandal

Ukraine’s anti-corruption agency, the National Anti-Corruption Bureau (NABU), released additional evidence of Zhora’s and Shchyhol’s alleged involvement in an embezzlement scheme on Wednesday.

According to the investigation, Shchyhol and Zhora, as well as four other suspects, managed to embezzle $1.72 million between 2020 and 2022 by classifying the procurement of software for the SSSCIP.

This software was intended to protect against cyberthreats, according to Shchyhol. Zhora explained that it was designed “to create and maintain secure electronic registers."

The investigators didn't mention the name of the company that developed the software. However, during the court hearing on Wednesday, prosecutors said it was EPAM Systems — a U.S.-based company that has offices in Ukraine and is one of the largest tech companies in the country. EPAM has not responded to Recorded Future News' request for comment.

According to NABU, the software was procured through intermediary companies linked to Ukrainian businessman Roman Koval, who is suspected to be the mastermind behind the scheme.

Koval is Zhora’s ex-business partner. The companies affiliated with him have been providing services to state agencies for the past seven years.

NABU speculated that Koval used his connections at SSSCIP to appoint “a loyal person” as the deputy head of the agency to oversee procurement. The Record couldn't independently verify this claim, but investigators published screenshots of Koval's alleged conversation with Zhora, in which they discussed the scheme and Zhora’s role in it.

Earlier this week, Shchyhol said that “all of the SSSCIP’s purchases from 2020 were carried out in compliance with current legislation.”

In a Facebook post on Thursday, Zhora said that the money investigators claimed was stolen was actually used to acquire extra services for the software in question. "Such work requires a large number of different specialists, additional contractors, and experts," he said.

Zhora declined to provide more details about the case and Shchyhol said that he would share more “in court and after defeating the enemy.”