The state auditing agency and the defense ministry have uncovered major illegal profiteering schemes in military logistics and are investigating for further irregularities, a government source said Wednesday.
The Board of Audit and Inspection (BAI) and the ministry launched a joint investigation into the logistics commands of the Army, Navy and Air Force in November last year, the source said. They did so after learning two defense contractors had pocketed large sums of money illegally by faking maintenance on Air Force fighter aircraft and transport jets, the source said.
"Two defense contractors are suspected of making illegal profits," the source added. "The sums amount to about 25 billion won ($22.4 million)."
The contractors allegedly claimed costs for maintenance work they did not do and also forged tax documents to make those profits, the source said.
According to the source, the BAI launched its investigation after the crash of a Lynx helicopter in April 2010. Investigators of the crash said a maintenance company had lied about replacing parts on the Lynx chopper. The BAI and the ministry officials are reviewing all maintenance and repair works commissioned by the logistics commands of the Army, Navy and Air Force to private firms from 2006 to 2010, the source added.
A BAI official acknowledged an ongoing investigation, but declined to comment further on the matter.
The BAI is expected to wrap up its investigation in the near future and determine if any active military officers are accountable for their lack of oversight in their dealings with contractors. (Yonhap)