Armenia's drive to recover stolen assets benefits elite businesspeople, not the state
Former officials, including ones facing criminal charges, have managed to sell properties in legally questionable deals while only one so far has agreed to reimburse the state.
Two years in, the Armenian government's campaign to seize illegally acquired property has achieved vanishingly little. In several recent cases former high-ranking officials – even ones facing criminal charges – have managed to sell large properties in transactions many argue involved collusion with the current authorities.
One of the key promises of Armenia's 2018 Velvet Revolution was that, after more than a decade of corrupt rule from the previous regime, the new authorities would "return the stolen money to the people and the state."
In 2020, Prime Minister Nikol Pashinyan's government passed a law on unexplained wealth, allowing prosecutors to place a hold on any property worth more than 50 million drams (about $129,000) and acquired since independence in 1991. The prosecutor then has the opportunity to prove that the property was acquired via corruption and if the court agrees, the state can take possession.
The first prosecution was launched in September 2021, and, to date, 34 cases regarding assets worth a total of about $380 million have been filed.
But, as the Prosecutor General's Office told Eurasianet, only one case has been resolved so far, and it's a drop in the ocean. The former director of the Academy of the Football Federation, Artur Manukyan, admitted that he had illegally acquired a land plot, apartment and car and on March 21 reached an agreement for repaying 85 percent of the amount in question, which was about $210,000.
The case of Vigen Sargsyan
Vigen Sargsyan was defense minister in 2016-18, under the previous authorities. After Pashinyan's revolution, he topped the former ruling Republican Party's list of candidates in the December 2018 parliamentary election but failed to win a seat. Shortly afterwards he left the country and has lived in the U.S. ever since.
In February 2023 he was charged in absentia with abuse of office related to the distribution of apartments for military personnel. (He denies the charge and claims he is being politically persecuted.)
He was involved as well in a separate case that involved two upscale apartments in central Yerevan that belonged to him and that had been considered "the subject of money laundering" under a criminal case opened in 2019.
But somehow Sargsyan was not prevented from selling them in November 2022 to Vahe Badalyan, a local gambling magnate, who, according to local media reports, is close to the authorities. The two apartments with a combined area of 340 square meters went for over $2.5 million, local media reported.
Norik Norikyan is a military lawyer and rights activist who is involved in the other (unrelated) case against the former defense minister regarding housing for military personnel. He believes Sargsyan colluded with the current government to be able to sell the two apartments.
"Otherwise, I don't understand how houses of such value involved in a criminal case and essentially the subject of money laundering, could be sold without hindrance. Without political patronage, it is impossible to do this," Norikyan told Eurasianet.
The case of Hovik Abrahamyan
In March 2022 Former Prime Minister (2014-16) Hovik Abrahamyan sold his central Yerevan mansion, which famously resembles the Armenian parliament building.
Again, the sale went through despite the fact that law-enforcement officials were studying the legality of the property's origin.
The property had been frozen in 2021 as part of a criminal case opened against Abrahamyan for alleged abuse of office. It was unfrozen a year later on the basis of an appeal filed by Abrahamyan's son. Immediately after that decision, and before the Prosecutor General's Office could file an appeal to refreeze it, the property was sold for 2.5 billion drams (about $5 million at the contemporary exchange rate).
Now the Prosecutor General's Office is demanding that Hovik Abrahamyan's family transfer 2 billion drams from the sale of the mansion to the state budget.
But officials have no intention of confiscating the property because it was procured by a "bona fide buyer." That buyer is Lilit Petrosyan, the wife of businessman Narek Nalbandyan, who has thrived since Pashinyan came to power in 2018.
Nalbandyan famously got hold of the luxurious Golden Palace Hotel in the resort town of Tsakhkadzor after it was handed back to the state in 2019 by the former head of the Customs Service, Armen Avetisyan. (Avetisyan relinquished control of the property after money laundering and other charges against him were dropped.)
Although the market value of the hotel at the time of its transfer to the state was 7.5 billion drams (over $15 million), it was sold to Nalbandyan for only 5 billion drams ($10 million) and in installments.
Signs of political patronage
These cases are not unique. The Armenian service of Radio Free Europe/Radio Liberty has reported that former Prosecutor General Aghvan Hovsepyan and a (now-deceased) former ruling party MP under the previous authorities, Seyran Saroyanm, also managed to sell upscale properties in central Yerevan that were acquired under terms of dubious legality.
The head of the Vanadzor office of the Helsinki Citizens' Assembly, human rights activist Artur Sakunts, says the buyer of Abrahamyan's mansion was perfectly aware of the property's questionable title and sees signs of political patronage.
"The buyer knew that there were risks associated with this house, but he bought it anyway, because he was sure that these risks could be eliminated," Sakunts told Eurasianet.
Many human rights activists and investigative journalists believe these transactions were facilitated by the current authorities in order to launder the assets of corrupt former officials. (Ruling party MP Vahagn Aleksanyan was asked by reporters on March 22 about the Hovik Abrahamyan case and denied that the authorities played any role.)
Hetq investigative journalist Tirayr Muradyan told Eurasianet that he found it suspicious that in almost all of the above cases, transactions for the sale of houses or land plots were made in conditions where the legality of their origin was being investigated by law enforcement officers. Moreover, these properties appeared in criminal cases as "material evidence."
"In the process, various legal justifications for these transactions were invented, but this is just a formality. In fact, the authorities gave the go-ahead to sell expensive properties with suspicious origins to people who can hardly be called random figures," Muradyan added.
Arshaluis Mgdesyan is a journalist based in Yerevan.