Moscow has arrested at least nine army officials in recent months in the midst of its Ukraine offensive, in what some analysts have called a purge of military figures seen as corrupt.
Investigators said Popov had enriched himself while overseeing the construction of the army-themed Patriot Park outside Moscow -- built to glorify Russia's military.
"A criminal case has been opened against former vice minister of defence of the Russian Federation, reserve general Pavel Popov," Russia's Investigative Committee said in a statement.
Popov is the third official linked to the construction of the park -- praised by the Kremlin for years -- to be arrested on suspicion of fraud.
Investigators said he had "enriched" himself while in charge of construction between 2021 and 2024, embezzling "valuables and goods".
They added that he then forced companies linked to the park to "carry out work in his country residence without paying for it".
The Investigative Committee said Popov and his family own homes "in prestigious areas of Moscow, the Moscow region and the Krasnodar region" worth 500 million rubles ($5.5 million).
Popov's arrest comes three weeks after two other officials linked to the construction of the park -- Vyacheslav Akhmedov and General Vladimir Shesterov -- were detained on embezzlement charges.
Popov served in Russia's emergency ministry before joining the defence ministry in 2013.
Russia began arresting defence officials in April, shortly before President Vladimir Putin replaced Defence Minister Sergei Shoigu with economist Andrei Belousov.
Russia's army sector has been historically marred by corruption scandals. Many have become frustrated by the lavish lifestyles of high-ranking military officials as troops fight in Ukraine.
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