In 2020, Tanner Cook, a 28-year-old from Arizona, opened a tiny ammunition store on a dusty road close the road on the outskirts of Tucson. Cook's first activity was located in a one-story beige concrete hall with a temporary inscription on the wall: ‘OTL IMPORTS’.
Cook's first clients were local weapon lovers, and 1 of Tucson's radio presenters advertised OTL Imports to aid his “really good friend” start the company. “He sells ammunition, sells weapons and has truly good prices,” he said. He's a truly cool guy!
A small over 2 years later Cook, who wears rear-handed black hair and likes to combine black suits with sunglasses, received an different order: his tiny ammunition store signed contract worth EUR 49 million (more than PLN 209 million) for deliveries to the Ukrainian army in the war against Russia.
Since the signing of the contract under which the OTL received in November 2022 a 35 percent advance of EUR 17.1 million (approximately PLN 73 million), the young owner of the local store became a player on the global arms market. Cook's Facebook profile photograph shows him standing in front of the Black Hawk chopper and shaking hands with an American army officer, and the caption under the photograph reads, "There are no more bodies to stack."
However, ammunition sold by Cook never reached Ukraine.
The Ukrainian side won the case against OTL in arbitration proceedings in Vienna, but has not yet recovered the money paid to the company.
Russia's invasion of Ukraine in 2022 caused the largest increase in request for arms in Europe since planet War II. While the allies of Ukraine from NATO provided massive military aid, the authorities of this country were besides forced to find ways to supply soldiers fighting on the front of 1000 km long.
Ukraine is inactive fighting Russia's lead in ammunition production. Kiev besides remains exposed to the ruthless whims of the global arms market. In respective cases, the authorities paid in advance large sums of equipment that were small known to companies, which had not yet arrived today.. In another cases, officials say that weapons sold at importantly overpriced prices due to the sharp increase in global request – which in the arms manufacture is equivalent to sharp price increases – reached in an unusable state.
Desperate search for weapons by Ukraine
According to data from the Ukrainian Ministry of Defence and papers received by journalists of the Financial Times, Ukraine has so far paid out $770 million to abroad arms brokers. (less than PLN 3 billion) advance on weapons and ammunition that were not delivered. This represents a crucial part of Ukraine's yearly budget for arms, ranging from $6 to $8 billion (about PLN 23 billion to over PLN 30 billion), spent from its own state resources since the beginning of the invasion.
The government in Kiev is trying to kind things out. respective erstwhile Ukrainian arms purchasing officials who worked on these transactions were released by the Zelenski administration, and any of them were accused of corruption. Tens of arms supply contracts are presently under investigation by the law enforcement authorities of the country. another transactions are subject to painfully slow arbitration proceedings in places like London and Geneva.
Several high-ranking erstwhile Ukrainian arms purchasing officials in the first 3 years of the war defended the usage of abroad broker services. In their view, these intermediaries helped to conclude key and delicate arms agreements. Everything happened at a time erstwhile Kiev needed to get immense amounts of ammunition produced by countries that – for geopolitical reasons – did not want to be seen as selling arms straight to Ukraine.
In 1 case, in April 2022, in accordance with the papers of the Ukrainian court, Ukrainian state arms broker Ukrspetsexport purchased 120-mm mortars from sellers who later turned out to have close links with Russian safety service FSB, as well as Wagner Evgeny Prigozin Groupwho later utilized Russian prisoners to wage a violent war against Ukrainian soldiers.
This vague supply process could have helped Ukraine in the fight, but it besides meant struggling with unlimited abroad entrepreneurs whose alliances could be purely commercial and zero-one.
– says Aleksandr Reznikov, Minister of Defence of Ukraine until 2023.
In the weeks following Vladimir Putin's invasion in early 2022, officials in Kiev realized that Ukraine had adequate ammunition for only 2 months.
At a time erstwhile the country fought for survival, the government suspended average arms supply rules, and state officials were tasked wherever possible to find non-NATO weapons supplies for the army, mostly equipped with Soviet-era equipment.
In the past, most of the home arms production in Ukraine was exported by various state-owned arms dealers, which collected any of the proceeds from brokering in these transactions. Now this process has been reversed, and intermediaries feverishly called their erstwhile clients and intermediaries abroad to get any equipment.
Sudden rush to search weapons for a positional war, which western producers had long since stopped prioritising, caused request to greatly exceed supply.
They all tried to get the same thing. The situation was somewhat like the COVID-19 pandemic, erstwhile masks became a deficit commodity.
In 2022, the yearly production of missiles suitable for the artillery of Ukraine, based on the russian model, amounted to 600 000 pieces – adequate for just 1 period of fighting, while at the same time constituting only 1 3rd of the 1.8 million missiles fired each period by Russia, according to Reznikov.
For a group of abroad arms dealers, almost everyone from America and Europe, Ukrainian desperation was an opportunity. At least 10 sources related to Ukrainian military purchases or arms dealers reported that russian ammunition prices increased 4 times in the first half of 2022.
Cigarettes and private jets
Around this time Cook’s OTL Imports, although inactive being an ammunition store in Arizona, first met with advancement representatives, 1 of respective Ukrainian state-owned companies mediating the import and export of arms to the state.
According to 2 people acquainted with Cook's situation, he was presented to advancement by American-Ukrainian businessman Mykoła Karanko, who had helped over 10 years earlier to make a major transaction between advancement and the Iraqi state.
The 2009 transaction with Iraq ended with a civilian case in Texas, where Ukrainian intermediaries were obliged to pay over 60 million dollars (US$230 million) to an American businessman for excluding him from the transaction. Karanko, who was accused in court of attempting to pay bribes to Iraqi officials on behalf of the Ukrainian side, did not answer FT's questions.
Cook said he could get mortar shells and mines from a maker in Serbia and received an advance of $17.1 million (PLN 65 million). Advances of this kind are common in the sale of weapons, where various supply chain links, specified as abroad factories, do not want to stay creditors of countries at war.
However, according to respective Ukrainian officials OTL never delivered missiles or returned payments. The study of the Ukrainian State Bureau of Investigation, to which the FT paper reached, showed that OTL did not have the essential certificates to export and transport ammunition.
Since the conclusion of the agreement with Ukraine Cook has seemed to grow its operations far beyond Arizona, participating in the Abu Dhabi arms fair. 1 of his presently removed social media publications from June Ub.r. depicts a man on a private plane, dressed in a black ski mask, with something that looks like Bloody Mary in front of him, blowing smoke out of a cigarette. Cook's signature is "cigarettes and private jets".
Progress refused to answer FT's questions on the reasons for the conclusion of the OTL agreement. Claims he won the case against the OTL before the Vienna global Arbitration Centre, an global commercial arbitration body, and was reimbursed EUR 21.3 million (nearly PLN 91 million), including advance, legal costs, interest and penalties.
The advancement informed France Télécom that it was ‘trying all possible ways’ for the arbitration decision to be recognised in the United States, and added that the OTL is subject to further investigation in Ukraine in connection with this agreement.
The Ukrainian National Anti-corruption Agency, the law enforcement agency, confirmed in writing that it is investigating the OTL. Ukrainian detectives have reported that they are trying to find where the money paid to the OTL is. No charges were filed against Cook or the company.
OTL and Cook's lawyers say their clients are denying any allegations. They did not answer FT's detailed questions about Ukraine's allegations.
Hope died last
Denys Sharapov, Deputy Minister of defence liable for abroad Contracts until September 2023, told FT that he had been swamped with arms and ammunition offers from tiny or comparatively fresh players who wanted to gain in the conflict.
— I received dozens of commercial offers from people who wanted to start business. It's normal. There are always fresh people who want to prove themselves," says Sharapov, adding that during his 18-month word he received about 25,000 arms offers. The task of Ukrainian defence officials at the beginning of the Russian invasion compared to the effort to extinguish the burning home “what he had at hand.”
At the end of 2022. Ukraine seemed to have an advantage in conflict. In November of that year, her troops liberated Kherson, and Russian forces were forced to retreat behind the Dniepr River. However, dense fighting continued, and the military inactive desperately needed artillery missiles.
About this time Alexi Petrov, then head of Spetstechnoexport, 1 of the largest state arms brokers in Ukraine, received an offer from the American company Regulus Global, which he could not refuse.
Petrov knew that The biggest challenge for Ukraine in the field of military procurement was that any of the largest arms and ammunition manufacturers are countries closely associated diplomatically with Russiawho did not want to be seen as a direct supplier to her enemy.
However, Regulus, founded and directed by a bearded American erstwhile stock broker Merrill Lynch, Willa Somerindyke, had a bold solution. She informed Petrov that she could get tens of thousands of artillery missiles on the planet marketplace precisely the kind of equipment Ukraine needed to operate NATO military equipment that began receiving this summer.
— The offer was rather attractive and very serious — says Petrov, who is almost 50 years old and worked in an office in Kiev, where artillery shells of various sizes stood in the corner next to his desk.
Regulus, headquartered in an office close the US Naval Air Station Oceana naval base in Virginia Beach, was founded in 2012 as a start-up for military logistics. She shortly began to make a niche in the area of the acquisition and transport of old weapons supplies. However, the breakthrough occurred during the Syrian civilian War erstwhile the company acquired Pentagon contracts to find and transport weapons for rebels supported by the United States.
Prior to the establishment of Regulus Somerindyke had respective controversial situations. In 2012, he was accused by the Virginia State Financial Supervisory Authority, SCC, of “frauding and misleading” erstwhile selling shares in a private start-up to a local dentist. In a parallel case, the American financial supervisor Finra imposed a fine of $10,000 (about PLN 38 thousand) on him and suspended his brokerage license.
Somerindyke, who has never admitted the allegations made to him by the Virginia State Regulatory Authority, claims that ‘he made a mistake by starting to rise capital for the media start-up before the broker's licence expires’ and reached an agreement with FINRA that he would pay the historical fine only if he decides to reactivate his licence.
In 2016, Regulus was sued by a widow of an American working as part of a training program in Bulgaria, which died as a consequence of a 30-year grenade explosion. Regulus, 1 of respective companies that performed the Pentagon listed in the lawsuit, was not liable for the training program, but provided equipment to the company that ran it. The case was yet settled in a confidential manner.
None of this seemed to substance to Petrov, the head of Spetstechnoexport, who trusted the reputation of a company supported by the Pentagon to supply hard-to-access military equipment in the global arms market.
Someridyke told FT that shortly after Russia's invasion in 2022 he began receiving calls from Ukrainian officials desperately seeking arms to defend the country.
— what we can get and how rapidly we can deliver it, he says. He adds that the decision to cooperate had a individual dimension. — My wife is Ukrainian, her household is Ukrainian. I was at the front. I'm as active in this case as I can.
By the summertime of 2022, Regulus had sent respective Antonow An-124 transport aircraft filled with BM-21 vehicles firing Grad missiles and russian kind D-20 Haubica missiles. According to Regulus, in 2023 the company supplied 70,000 155 mm caliber missiles to Ukraine.
However, the stock of old ammunition in Europe rapidly ran out. A race in the manufacture of ammunition that has not been needed since planet War II has sparked a global shortage, prompting any suppliers to break existing contracts or drastically increase prices.
“ The supply chain has been problematic before, and supplies around the planet have practically run out, ” Somerindyke says. They all fought for the same thing. The situation was like a time of pandemic erstwhile masks became a deficit commodity.
This meant that when Regulus offered Petrov the transportation of tens of thousands of 155 mm caliber missiles, Ukrainian took advantage of the occasion.
Part of the ammunition came from a state-owned maker in a country closely related to Russia, who did not face the same shortages of natural materials and components. Petrov claims that Regulus' management assured him that through contacts in the U.S. State Department he would be able to deal with any political complications.
The Start of Trouble
Soon afterwards Regulus signed with Spetstechnoexport a contract worth up to $1.7 billion (about PLN 6 billion 500 million), depending on the supply – 1 of the largest Ukrainian military equipment acquisition transactions during the war.
Regulus claims that his full activities were conducted under the supervision of the defence Trade Control Directorate of the U.S. Department of State, the body liable for controlling the export of defence and military technologies from the US.
Spetstechnoexport claims that he paid Regulus $126.6 million (about PLN 622 million) in advance payments and deposits for the implementation of part of the 155 mm rocket transportation contracts, as well as another payments of EUR 14 million (less than PLN 60 million).
However, the Ukrainian state company claims that Regulus violated the terms of the agreement and has not yet returned the money to Kiev. She claims that as of September 2024 Regulus broke all contacts and stopped responding to her writings. Officials in Ukraine believe that Regulus has allocated advances to, among another things, production facilities. “They utilized the money we sent them... to buy fresh assets,” says Petrov.
Spetstechnoexport is presently attempting to recover the money due to him through arbitration proceedings.
Regulus powerfully denies these allegations and claims that he continues to supply Ukraine with crucial amounts of ammunition. He claims to have invested in a number of supply chain resources, including production and transport, in order to get the capacity needed to deliver large contracts.
American company says it's Spetstechnoexport did not pay Regulus the amount of an advance of about $500 million (PLN 1 billion 912 million) agreed in the agreement., accounting for 30% of the full amount, in order to safe ammunition, paying the American company only about $100 million (PLN 382 million). Regulus besides argues that he was the victim of dysfunction and interior struggles between various actors active in the Ukrainian public procurement process.
“ Somerindyke explains.
According to him, Regulus had to cover the missing amount of the deposit itself in order to proceed to supply ammunition to Ukraine. “This has caused a dense financial burden for our company... We took a beautiful large loan, he says.
Regulus informs FT that ‘the current net state between Regulus and Ukraine for direct supply contracts of 155 mm missiles is about $350 million (PLN 1 billion 338 million) in favour of Regulus alternatively than vice versa’.
Petrov, who left Spetstechnoexport in March this year, denies this information, claiming that the intermediary had no contractual work to transfer this money. The Ukrainian side filed a complaint with the Pentagon and the US embassy in Kiev.
Spetstechnoexport considers that his request for arbitration in London aims to recover $346 million from Regulus (1 billion PLN 323 million), including advances, outstanding debts and penalties.
Attempt to rescue the situation
In January 2024, Maryna Bezrukov, an experienced supply chain expert who worked for the state energy network operator Ukrenergo, was appointed the fresh head of the Ukrainian Defence Procurement Agency.
Ukrainian partners with NATO were afraid about a series of national scandals related to military procurement. An unrukova, valued and industrious authoritative known for her long hours of work until late night hours, was given the hard task of carrying out a thorough improvement of the way the Ukrainian Ministry of National Defence buys weapons and ammunition.
A fewer months earlier, in September 2023, Reznikov, who had been Minister of defence since the invasion of Russia, was released by the president of Ukraine Volodymyr Zelenski after respective allegations of overpriced food prices and uniforms for soldiers, as well as a abroad ammunition transaction involving 3 different intermediate companies.
Although Reznikov was not straight active in the scandals, Zelenski then stated that the Ministry of Defence needed a "new approach".
Reznikov told FT that any defective arms supply contracts were an unfortunate consequence of the urgent request to arm Ukrainian soldiers fighting on the front at the start of the war.
– During the war, there is 1 measurement of effectiveness: you deliver quite a few weapons to the front and rapidly hand them over to the armed forces. I am not curious in anything else – he says that the ministry had no time to consider price differences. “ People who have no missiles are killed on the front, and we gotta deliver missiles to them all day and all night,” he adds.
Reznikov claims that problematic contracts are only part of a more transparent overall image of the situation. “ How many contracts have been signed?” he asks. “ And how many of them went to court? ”
Two erstwhile heads of military procurement, Toomas Nachur and Oleksandr Liew, were besides prosecuted for signing a complex rocket contract originating in Croatia, where $12.5 million (less than PLN 48 million) advance was allegedly spent on unrelated activities by various intermediaries.
Both powerfully deny the allegations, claiming that they were subjected to constant pressures to get weapons and ammunition at all costs at the minute their country fought to survive.
— The General Staff wanted 100 times as much as we could buy, says Nachur, who besides blamed all the dubious transactions of rogue players in the arms market.
Following its appointment, Bezrukov rapidly took action to centralise public procurement powers in its agency to increase transparency and avoid further adverse transactions, waste or hazard of corruption.
However, as he claims in his interview with FT, at erstwhile she had to deal with the continuous fight against Ukrainian state arms brokerswho, he claims, resented her taking control of the budget funds.
One of the contracts she refused to accept further payments was the agreement between Regulus and Spetstechnoexport. In September the U.S. company tried to transfer its contract from a state broker to its agency. However, Irrukova blocked this change, claiming that Regulus had requested another prepayment.
— The money has already been partially paid by Spetstechnoexport as an advance, and paying twice the advance for the same product is, as is known, wrong, he says.
Regulus denies these allegations, claiming that he never attempted to get a double payment for the same goods, but simply acted to guarantee an uninterrupted supply of ammunition to Ukraine.
In January this year, the fresh defence minister of Ukraine Rustem Umerov accused Bezrukov of transforming her agency "in Amazon", which made the country's public procurement activities besides visible to its enemies, resulting in her being fired.
Her release a small over a year after the start of work sparked fresh concerns for Kiev's allies. In response, G7 diplomats issued a message highlighting the importance of "good governance" and "maintaining the assurance of public and global partners".
W Kiev has taken any steps to alleviate the concerns of allies about irregularities in public procurement.
The 4 Ukrainian law enforcement authorities are investigating respective twelve contracts signed with abroad arms brokers, and criminal proceedings have been initiated against erstwhile Ukrainian public procurement officials in any cases. However, almost no of these cases ended with the prosecution filing an indictment.
The Ukrainian Ministry of Defence claims that it demands a return of $309 million in the court (1 billion PLN 181 million) of advances paid to abroad suppliers for contracts which are no longer considered feasible. The remainder of the money, around $460 million (1 billion 760 million), the ministry intends to recover by means of pre-trial negotiations with suppliers.
However, detectives argue that the work is laborious and hampered by slow global cooperation by the United States and the European Union. According to them, the United States needed at least six months to respond to requests for common assistance, and in 1 case refused to supply information on a suspicious transaction involving 1 of the companies, citing national safety considerations.
Many arms brokers who arrived in Kiev at the beginning of the war did not return to proceed their business with Ukraine.
Anti-corruption activists believe that eliminating these abroad intermediaries is crucial for lowering prices and avoiding adverse transactions. However, at a time erstwhile Ukraine fights to arm troops on the front, and Trump's administration threatens to cut off military support for this country, any Ukrainian arms manufacture officials claim it will harm Kiev's self-sufficiency.
— I am most likely 1 of the fewer madmen who remain,” says Somerindyke of Regulus, who believes that what he called “bureaucratic inefficiency” caused the departure of many abroad arms dealers.
Petrov, a erstwhile Spetstechnoexport employee, claims abroad brokers are essential for further arms supply as they take financial and logistical risks on behalf of Kiev.
Alexi Petrov, erstwhile head of Ukrainian state arms broker, claims that Regulus Global's offer to supply artillery was "attractive and very serious".
— The producers say, “If you don’t pay, we won’t give you anything,” he says. “There are many intermediaries who say, “We will usage our money, take risks.”
However, Ukrainian detectives investigating failed arms contracts claim that more Allied governments should force producers to sale straight to Ukraine, eliminating intermediaries and ensuring greater price transparency.
— The more intermediaries, the higher the price, says one.
Meanwhile, Cook of OTL – a young American arms dealer from whom Ukraine tries to recover money for insufficient ammunition – has come a long way from moving a tiny arms store in Arizona.
According to various registration documents, the American founded respective abroad companies, including a real property company in Kosovo and a start-up company in Prague.
However, Cook besides suffered costly losses due to deficiency of supply of the goods.
In July 2023, just over six months after signing a military contract with Ukraine, which provided him with a career, Cook met a man in Las Vegas who introduced himself as a erstwhile banker specializing in transactions in an unfriendly environment.
Cook then flew to Kenya, according to a study submitted by him on the Kenyan police, to acquisition gold bars worth 1.2 million dollars (4 million PLN 589,000). He donated money to an African seller from a company registered in Wyoming. Unfortunately for Cook, gold, like ammunition from Ukraine, never reached the recipient.
