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Deputy mayor held as police probe "massive" fraud in property deals

MOSCOW, February 06. /ITAR-TASS/. Police investigating alleged abuse of power and fraud that amounts to more than 13 million rubles ($366,000) have arrested a deputy mayor in Chita, Siberia.

Suspects still to be identified have conspired with officials of the city's infrastructure development committee to embezzle public funds set aside to buy flats for orphans, detectives say.

Russian Investigative Committee spokesman Vladimir Markin told Itar-Tass on Thursday that inquiries into "massive fraud" had resulted in the detention of deputy mayor and chairman of the committee for city infrastructure development Vyacheslav Shulyakovsky.

The official's house has been searched. Restraint measures against the suspect will be announced soon, investigators say.

Announcing the arrest, spokesman Markin said city officials had artificially restricted access to tenders for the purchase of the orphans' accommodations. "When posting announcements of tenders on the Internet, officials replaced Cyrillic letters with Latin letters that complicated internet searching,” Markin said.

Tender results favored a limited liability company from which flats were bought at an inflated price, the spokesman said. Nine Chernovsky and Ingodinsky district apartments with a market cost of no more than 7.5 million rubles ($214,500 thousand) were bought from the company for 12 million rubles ($343,200 thousand).

Eleven flats bought in Chernovsky for 16.1 million rubles ($460,500) had a market cost of no more than 7.7 rubles ($220,200).

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