Oleg Korshunov is accused of syphoning off funds from a major state contract to supply fuel and food to prisons between 2015-2016, Russia's powerful Investigative Committee said.
The official was detained yesterday by the FSB intelligence agency at his yacht club, TASS news agency reported.
Russia's prison system is often criticised by rights activists for poor conditions and abuses.
Official graft is rampant in Russia and Korshunov is just the latest high-profile official to be arrested for allegedly stealing large sums.
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