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Ex–Armenian president’s relatives under investigation for tax fraud

2 July 2018
Levon Sargsyan and Serzh Sargsyan

Armenia’s authorities are investigating Levon Sargsyan, the brother of Armenia’s former President Serzh Sargsyan, along with his son Narek and daughter Ani, for possible tax evasion and illicit enrichment.

According to the State Revenue Committee, their investigative department has launched a criminal case against Armenian real-estate company JLJ Project Company, after a probe into tax evasion and illicit enrichment was started by the committee in May. The authorities have claimed that Levon Sargsyan, the brother of former President Serzh Sargsyan, runs the company and owns 40% of its shares through his charity foundation, Pyunik.

On 25 June, the Revenue Committee raided the company’s offices as a part of an investigation into tax evasion during the construction of an office building in Yerevan. On 29 June, the committee announced that the JLJ had been fined ֏800 million ($1.5 million) for tax evasion via bankruptcy fraud. The authorities claimed that between 2013 and 2017, JLJ paid only ֏3.5 million ($7,300) in taxes when it should have been liable for ֏147 million ($307,000).

After searching the house of Levon Sargsyan’s son Narek, who owns 20% of the company, authorities reported having found financial documents detailing bank deposits worth $6.8 million under his father and sister’s names.

The Revenue Committee said that neither Levon Sargsyan nor his children could provide a legal explanation for how their income skyrocketed last year. Levon Sargsyan both during that period and now was an ambassador-at-large — a high ranking diplomat — in Armenia’s foreign service.

Serzh Sargsyan’s other brother, Aleksandr (Sashik) Sargsyan, was detained on 25 June, together with his bodyguards, for illegal arms possession, but they were later released when the authorities announced that they did, in fact, have the necessary permits.

On 25 June, Armenian authorities made another high-profile anti-corruption arrest. The National Security Service apprehended the former chief of the ex-president’s security detail, general Vachagan Ghazaryan after he withdrew more than $1 million in cash from a bank in Yerevan. The authorities said Ghazaryan intended to later withdraw more money from another bank in Yerevan.

According to the Security Service, Ghazaryan failed to declare the money, saying he ‘forgot’ to do so, and failed to explain where the money came from following his arrest. Ghazaryan is the first person to be charged with illicit enrichment since the introduction of the law in 2017.

Corruption crackdown

The authorities under Nikol Pashinyan have conducted a large-scale anti-corruption campaign with a number of high-profile arrests since he came to power. Pashinyan replaced Serzh Sargsyan as prime minister after weeks of street protests forced Sargsyan’s Republican Party from power.

Artak Manukyan, the Prime Minister’s advisor on economic issues, claimed that as a result of the anti-corruption campaign, ֏18 billion ($37 million) have been returned to the state budget.

In a 26 June meeting with law enforcement agencies, Pashinyan underlined that it was important to adhere ‘to lawfulness and the respect for human rights’ so that there would be no doubts that his government’s crackdown on corruption was politically motivated.

During his speech at the centennial anniversary of the Prosecutor's office of the Republic of Armenia, Pashinyan reiterated that those 'found guilty must be held responsible, and their conviction must be adequate, lawful, and just’, while the rights of those accused must be protected in court.

On 16 June Vagharshapat Mayor Karen Grigoryan resigned amidst protests over allegations of corruption. His resignation followed the arrest of his father Manvel Grigoryan, a veteran general and the head of army volunteers union Yerkrapah. On 23 June, he was charged with gross embezzlement.

Footage released of the raids on Manvel Grigoryan’s properties, showing his wealth as well as dozens of weapons and army supplies he allegedly misappropriated, shocked the Armenian public. On 20 June, his wife Nazik Amiryan was also arrested on charges of illegally obtaining and possessing a large stock of arms.

Both father and son were affiliated with the formerly ruling Republican Party of Armenia.

[Read more about Grigoryans’ case on OC Media: Armenian ‘hero’ general arrested for stealing military aid]