The son of former Finance Minister of Armenia Gagik Khachatryan has refused to turn himself in after being charged with money laundering and corruption. Gurgen Khachatryan, who denies the charges, remains at large and the National Security Services are currently searching for him.
Allegations were first brought against Gurgen Khachatryan on 14 January. He was accused of taking part in a corruption scheme involving his father, who has been in pre-trial detention since 27 August 2019 on corruption charges.
According to the National Security Service (NSS), the scheme also involves Sedrak Arustamyan, the director of Multi Group Concern, which is owned by the family of opposition leader Gagik Tsarukyan. Tsarukyan heads the Prosperous Armenia Party.
The NSS have accused Gurgen Khachatryan of aiding Arustamyan in transferring a bribe of $22.4 million disguised as loan agreements to his father. The sum was transferred to companies registered abroad that belonged to Gurgen Khachatryan and his brothers.
The Khachatryans and Arustamyan, who himself has been in pre-trial detention since 25 April, deny the charges.
According to their lawyers, a loan agreement between the two parties which was signed in 2011 remains in force. They insist the loans were used to purchase property abroad to later resell for a higher price.
The agreements remain in force and the loan, along with interest, has not been repaid.
On 3 May, Gurgen Khachatryan issued a statement refusing to surrender to the authorities.
‘Taking into account that these processes are illegal, the decisions by the investigative bodies and courts are being directed, I don’t find it appropriate to get involved in these processes and become a detainee thus contributing to the development of this illegal scheme’, his statement read.
‘Pressure’ on Ucom
Gurgen Khachatryan has accused the authorities of illegally applying pressure on businesses owned by their family.
The Khachatryan family owns a vast amount of wealth and businesses in Armenia.
The Galaxy Group of Companies, which is owned by the family, claims to employ 3,000 people. According to Gurgen Khachatryan, Galaxy Group is one of the country’s largest taxpayers, paying ֏13 million–֏15 million ($27,000–31,000) in taxes annually.
The group includes movie theatre KinoPark, the Yerevan Mall, high-end jewellery brands such as Pandora and Time, construction company Roomshin, restaurants and cafes, a sportswear and equipment store chain, a toy store chain, and more.
It also includes telecommunications company Ucom and IT company IUNetworks.
On 28 April, Gurgen Khachatryan issued a statement claiming the authorities had demanded he sell his shares in Ucome and IUNetworks.
He said the state had illegally frozen shares and assets of both companies and threatened to ‘make the situation within the companies so unmanageable that they would be forced to sell them at the lowest price possible.’
He also said the authorities had threatened to charge him and other members of his family with serious crimes if he did not comply.
On 30 April, the NSS conducted searches in companies and offices belonging to Galaxy, as well as the homes of Khachatryan family members.
In an interview with Hetq, Gurgen Khachatryan’s lawyer Yerem Sargsyan said that the NSS didn’t find anything of importance and did not confiscate anything. ‘They did this for the sake of doing it,’ said Sargsyan.
On 2 May, the office and car of Ucom’s new executive director, Ara Khachatryan, was also searched by the NSS. They later also searched his home and confiscated his laptop and documents concerning Ucom.
Amram Makinyan, a lawyer representing both Ara Khachatryan and Gurgen Khachatrayn, told Hetq that they would be appealing against the court’s decision to grant the search warrant as there is no criminal case concerning Ucom.
On 4 May, the NSS issued a statement claiming that Gagik Khachatryan embezzled money while in government and transferred it to Ucom.
Return stolen money
The authorities have insisted that the Khachatryan family amassed much of their wealth through corruption.
On 28 April, the Prime Minister’s spokesperson, Mane Gevorgyan, issued a statement on Facebook accusing them of accumulating hundreds of millions of dollars through corruption schemes and what she called a ‘mafia system’.
She said the family had expressed a willingness to ‘return the money they had stolen from the state and restore the damage done to the country.’
She also mentioned the situation with Ucom, claiming that, according to the law, alienating shares was only possible with the approval of the country’s government.
‘When a dispute broke out between the shareholders and the issue of changing shareholders was put on the table, the government’s position was that the sale of the shares of the Khachatryan family would only be possible if the amount they received from the sale would be transferred to Armenia’s state budget.’
‘This position is in force still today for any property obtained illegally’, said Gevorgyan.
Khachatryan has denied Gevorgyan’s claims. His lawyer, Yerem Sargsyan, said that Gevorgyan’s statement was proof that the state was directly interfering in private businesses.