Khachatrian, who was arrested in August 2020 and freed on bail more than a year later, is facing a string of accusations, including abuse of power, forgery and bribery.
In particular, he stands accused of receiving more than $20 million to ensure privileged treatment of companies owned by Gagik Tsarukian, one of Armenia’s richest men. According to the National Security Service (NSS), the bribe was paid in 2009 by Sedrak Arustamian, the top manager of those companies, in the form of two bogus loans transferred to Khachatrian’s overseas bank accounts.
Both Arustamian and Khachatrian maintain that the massive cash transfer was a commercial transaction.
Khachatrian and his family used the money to buy the 3,126 square-meter (33,652 square-foot) mansion in an exclusive Los Angeles area in 2011. The U.S. Department of Justice moved to seize the property in early May weeks after it was put up for sale with an asking price of $63.5 million. In a forfeiture complaint filed in a California district court, the department alleged that the “mega-mansion” was purchased with bribes paid by Arustamian.
“Gagik Khachatrian and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia,” it noted in a May 5 statement.
Armenia - Former Finance Minister Gagik Khachatrian and one of his nephews go on trial, August 26, 2020.
Khachatrian’s legal team rejected the allegations and pledged to fight against the asset seizure in the U.S. court. One of the defense lawyers, Yerem Sargsian, insisted on Friday that the U.S. authorities lack “factual evidence” in support of the allegations.
“Everything was done very transparently,” he said, referring to the purchase of the Los Angeles mansion.
According to a spokesman for Armenia’s Office of the Prosecutor-General, U.S. law-enforcement officials have assured their Armenian colleagues that proceeds from the sale of the property will be given to Yerevan if they succeed in confiscating it.
Khachatrian himself was reluctant to comment on the proceedings launched by the U.S. Department of Justice. “Only my lawyers can comment on these issues,” he told RFE/RL’s Armenian Service during the latest session of his ongoing trial in Yerevan.
Khachatrian’s two sons and one of his nephews went into hiding in 2020 after being also indicted in the high-profile case. Their whereabouts remain unknown.
Khachatrian, 66, headed Armenia’s State Revenue Committee (SRC) from 2008-2014 and served as finance minister from 2014-2016. He was dogged by corruption allegations throughout his tenure, with some media outlets and opposition figures accusing him of using his position to enrich himself and his extended family.
They pointed to the family’s extensive business interests, which include a major telecommunication company, a shopping mall and a car dealership in Yerevan. Khachatrian repeatedly denied setting up or supporting these businesses, saying that they belong to his sons and other relatives.