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Russian prison administration officials are suspected of stealing over $53 million after they tampered with the country's first contract for electronic bracelets, investigators said on Friday.
Russia is following in the footsteps of Western countries in introducing electronic monitors for more minor offenders to relieve its notoriously overcrowded prisons.
In violation of legislation, prison officials in 2010 awarded Russia's first contract to make electronic bracelets to their favoured bidder without holding an open-bid auction.
"With the aim of eliminating competitors, they signed a number of state contracts among themselves," said the Moscow branch of the Investigative Committee.
At the time, the state company that was awarded the contract did not have production lines and even premises to launch full-scale production so the prison officials had to outsource the work to outside firms.
On top of that, executives at the Federal Service for the Execution of Punishment, known under its Russian acronym FSIN, deliberately inflated the prices of the bracelets as well as the numbers needed for the country's prisons, investigators said.
"The real value of the purchased equipment has been exceeded by more than 1.65 billion rubles ($53 million)," the investigators said in a statement.
The statement said prison officials had been able to take possession of the funds themselves. It did not name the officials suspected to be involved.
Prison officials bought 23,900 electronic monitors while in reality only 9,375 were being used, the investigators said.
The bracelets were supposed to rely on the global positioning system known as GLONASS, known as Russia's version of GPS, but most lacked the elements that would allow them to receive the signal.
Corruption is a major national embarrassment for Russia with critics charging that it has grown worse during strongman Vladimir Putin's 13 years in power.