MOSCOW. July 10 (Interfax) - Yevgenia Vasilyeva, a former head of the Russian Defense Ministry's property department, on Thursday denied her charges of heading a group accused of large-scale embezzlement in the Oboronservice company, an Interfax correspondent reported from a court.

"There was only one purpose for this criminal case: to defame the Ministry of Defense and create an image of corruption and theft. The investigators have failed to achieve it, which will become obvious in the course of this trial," Vasilyeva told Moscow's Presnensky Court after the prosecutor stated the indictment.

"I never set up any organized group, I never drew any of the persons who are accused in this case [into the alleged scam]," she said. She claimed that the case was a frame-up and that the alleged crime ring was part of it.

Besides Vasilyeva, who is the chief figure in the case and charged on 12 counts with infliction of damages of more than 3 billion rubles on the state, there are four defendants in the trial.

They are Maxim Zakutailo, a former general director of the logistics depot of the Moscow Air Force District, Larisa Yegorina, general director of Oboronstroi, Yury Grekhnyov, general director of the 31st State Institute for Specialized Construction, and Irina Yegorova, an ex-chief financial officer of the Mira company who is accused of helping launder the allegedly stolen money.

Investigators say Vasilyeva, "taking advantage of her office, chose the most liquid real estate items, shares and other property belonging to