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Ararat Davtyan

Routine Business: Credit Card Fraud and Money Laundering

Retailers Found Guilty but Won’t Do Jail Time Last year, Vardan Avetisyan and Vazgen Pkhrikyan, in two separate cases, stood before an Armenian court, charged with bank fraud and money laundering. According to the indictment, the two had illegally copied “MBNA America Bank” cards to extract funds and then laundered the stolen cash.

In both cases, the criminal charges were reviewed by the Department of Investigation of the RoA National Security Service. Vardan Avetisyan – furniture salesman cons banks out of 42 million AMD A criminal case was initiated against Vardan Avetisyan on November 4, 2008. Four months later, the case has handed over to Kentron and Nork-Marash District Court. Vardan Avetisyan was the director of “Skava Ltd”, a furniture importer/exporter. The company’s furniture showroom is located on Sasuntsi Davit Street in Yerevan. Armenia’s “Inecobank” entered into an agreement with the “Skava” to install an automated teller machine at the showroom. It was at this automated teller that Vardan Avetisyan used the fake MBNA bank cards to withdraw 15.2 million AMD on November 2, 2008. Mr. Avetisyan then deposited the cash in an account he had opened in Inecobank, under the name of “Skava Ltd.”, Fake American customer and passport Later, Mr. Avetisyan finagled the books to make it appear that the money had come from a sale of furniture to one “Jeffrey Parker”, an American citizen. During the pretrial investigation, Mr. Avetisyan stated that on the day in question, “a foreigner used a bank card to purchase furniture.” Mr. Avetisyan said that he even compared the customer’s signatures appearing on his passport and bank card. As proof, Mr. Avetisyan provided investigators with copies of the American’s passport and card. However, an official at the RoA National Bureau of Expertises, a State Non-Commercial Organization, concluded that the passport copy was also a computer-generated forgery. Store was closed on day on alleged furniture sale Violeta Simonyan, who was working at the time at the furniture showroom as a consultant, told investigators that it was just she and manager Vahagn Hovhannisyan at the store from 10 to 7 daily. Simonyan said that the showroom was closed on Sundays. (November 2, 2008, the day of the alleged furniture sale to Jeffrey Parker, was a Sunday). Simonyan also said that when she went to the showroom on Monday, there were no changes in the floor samples. Manager Vahagn Hovhannisyan told the court that half the showroom would have been empty if 15 million AMD worth of furniture had been sold. “We saw no such thing,” he testified. Vardan Avetisyan told the court that in 2008, on his way back to Armenia from a business trip, he had made the acquaintance of one “Hovik” in Italy. Hovik, according to Avetisyan, had no money for a boat ticket, so he gave the man 600 Euros. Back in Yerevan, Avetisyan met up with Hovik at the furniture store. Hovik returned the money lent to him in Italy. They two became close friends. Hovik propose to Avetisyan that he help out the businessman by rounding up potential customers. At the next sale, Hovik is to have said that one of the customers wished to pay with a credit card. Later, Hovik is to have said that there was a problem with some figure and that the transaction couldn’t be completed. Thus he asked that the amount be returned and he didn’t refuse and gave the automated teller receipt, not examining the numbers. He trusted Hovik. The next day, realizing that a sale didn’t take place, but that a money transaction had been registered, Avetisyan decided to make an accounting entry that would show that a transfer had been made form his name to the company; showing a bank transfer from his account to the partners and tax authorities. Avetisyan says that he has no idea whose bank card Hovik used to make the transactions. The National Security Service revealed that Vardan Avetisyan made two illegal withdrawals back in September and October, 2008, as well. Avetisyan is said to have used fake MBNA cards to withdraw money from the teller machine at his store in the amounts of 12.367 million and then for 14.780 million AMD. He deposited the funds in the “Skava” account at Inecobank and devised an accounting entry to make it appear that the money was personal capital invested in the company. In the end, Avetisyan was able to illegally get his hands on 42.269 million AMD. He thus inflicted damage on customers of the American bank and, indirectly, on Inecobank. The preliminary investigation wasn’t able to explain where Avetisyan procured the fake bank cards in the first place. Arman Mntasakanyan, legal representative of Inecobank, told the court that Master Card, the credit card company, was demanding that Inecobank return 3 million AMD. Later on, the Inecobank representative stated that the true amount of the loss was 1 million AMD and that it would be filing a civil suit for that amount. Vardan Avetisyan, a college graduate, declared his guilt in court, expressed his remorse and returned all of the ill-gotten gains. Throwing himself at the mercy of the court, he pleaded for a light sentence. Judge Zhora Vardanyan, taking into account that the accused was married with three young children and that he had shown remorse for his actions, concluded that his rehabilitation was possible by conditionally not carrying out the sentence. Judge Vardanyan sentenced Avetisyan to 8 years but then modified it to 4 years probation. The court also sustained Inecobank’s 1 million AMD civil suit. Vazgen Pkhrikyan: Shoe Salesman Pleads Innocent in 1 million AMD swindle Vazgen Pkhrikyan, the other individual in our story, appeared in the same court and faced Judge Zhora Vardanyan as well. Pkhrikyan was also charged with grand theft and laundering the funds. According to the indictment, Pkhrikyan opened a commercial venture selling shoes on a plot of land that he owned at the intersection of Nor Aresh and Erebuni Streets in Yerevan. There was an Ararat Bank automated teller in his store. Sales were transacted in cash as well as bank card. Grigor Tsolakyan, who headed the Ararat Bank’s Card Transactions Division, testified in court that in October, 2008, he received a memo from “Armenia Card” CJSC stating that a suspicious 1 million AMD sale had been registered at the shoe store. Hayastan Gasbaryan, a sales clerk at the store, told police that on October 3 she was told by store manager Vazgen Pkhrikyan not to come to work since they would be receiving an inventory shipment. Gasbaryan testified that she knew nothing of the 1 million AMD in sales recorded for that day. All she could tell the court was that on an average day, during the hours she worked, the store made 25,000 – 30,000 AMD in sales and that there was never a day when the store sold 1 million worth of merchandise. The preliminary investigative body charged Vazgen Pkhrikyan for using a fake MBNA to defraud Master Card and Armenia Card of 1 million AMD. The indictment goes on to claim that Pkhrikyan deposited the funds in an account he opened at Ararat Bank under the name of “Ava Décor Ltd”. He then cashed the funds and entered the money as revenue in the company register. Pkhrikyan refused to offer testimony during the pretrial investigation and in court; stating that he innocent of all the charges. Nevertheless, he asked the court for clemency and to be pardoned. Judge Zhora Vardanyan appears to have heeded his plea, sentencing him to three years and then immediately pardoning him. Pkhrikyan strode out of court a free man.

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