Several construction companies in the Sverdlovsk region were paid 117 million rubles ($3.9 million) under government contracts but didn't finish the work, the Investigative Committee's branch in the Sverdlovsk region said Friday, Interfax reported.
A negligence investigation has been opened in connection with the case.
Between 2007 and 2012, the companies were expected to build housing for disabled people and veterans of World War II and their families.
The money was transferred to the companies based on documents signed by officials of the Fund for Promoting the Construction of Single-Family Homes.
"In fact, the construction companies have not fully performed construction work under the government contracts, and the buildings have not been put into operation," the branch said.