MOSCOW, March 19 (RIA Novosti) - Former top managers at Russia's state-run Pension Fund are accused of illegally buying real estate for employees using 43.5 million rubles ($1.8 million) from the pension fund, the Interior Ministry said on Wednesday.

The ministry's economic security department said in a news release that during 2004-05 top managers at the pension fund signed nine contracts with Moscow's construction investment department to buy apartments using extra-budgetary funds intended for social development and construction.

The apartments were registered in the names of pension fund employees.

"The fund's management therefore violated laws stipulating that residential property, acquired using government funds, can only be offered to fund employees for rental, and must be registered as Russian Federation property managed by the Pension Fund," the press release said.

Under Russian law, if found guilty those accused could face between five and 10 years imprisonment and a fine of up to a million rubles ($42,000).

Late last year, Prime Minister Viktor Zubkov accepted Pension Fund chief Gennady Batanov's resignation. The government's press service said in January that Batanov's resignation was due to him reaching retirement age.

But Audit Chamber head Sergei Stepashin said the decision followed a joint inspection of the fund's operation by the Audit Chamber and the Prosecutor General's Office.

Batanov was appointed head of the Pension Fund in March 2004, following three-years as an auditor at the Audit Chamber supervising the Pension Fund in addition to other duties.