Thursday, 20 September

General Prosecutor's Office vs. Najarians



See also: The fate of the building at Dzoragyugh #4

In December 9, 2004 the Court of the First Instance of Kentron, Nork - Marash Communities partially satisfied the claim of a US citizen George Najarian. The Court ruled that the criminal proceedings in the case shall continue and George Najarian shall be recognized as the aggrieved party. The Republic of Armenia General Prosecutor 's Office is against this decision of the Court, filing an appeal to the Court of Review on Criminal and Military Cases in December 24, 2004 . The General Prosecutor's Office required from the Court to abolish the decision of the Court of the First Instance. That is, the General Prosecutor's Office believes there is no need to continue the criminal investigation into the case, despite previously instigated criminal case against Grigor Igityan on fraud charges.

After reviewing eleven volumes of materials of this case I decided to visit and talk with Grigor Igityan. I first met Grigor almost one year ago. He told me then that he was being treated unfairly and requested me to deal with his case. I was intrigued by hours long meetings with him and the materials he provided then. In March 2004 I met George and Carolann Najarians in Boston . They told me their story and suggested to look at the documents in Yerevan with their representative Ashot Poghosyan.

In his interview to us Grigor Igityan added almost nothing, repeating just what was already provided in his testimonies, even withdrew some of his testimonies when I reminded him of them.

General Prosecutor's Office had every basis to conclude the criminal case and send it to court, but a weird twist in the course of investigation caused a decision to dismiss the case.

Someone is behind this case determining the course the case is following. Ashot Poghosyan, lawyer representing Najarians, says it is not important and that he is not even interested to know the person behind: "The rule of law is important." he says. Indeed, I do not share Poghosyan's view; in Armenia the law always depends on the official for whom the law is being "used", while the law enforcement bodies and courts "fit" the law into either the official's desire, or a "treatment demonstrated." George and Carolann Najarians had meetings with the former Prosecutor General Aram Tamazian and his successor, the Prosecutor General Aghvan Hovsepian. The former Prosecutor General promised a thorough investigation of the case. Aghvan Hovsepyan, the current Prosecutor General, told Carolann Najarian that there was no penal action in this case and suggested to try the case through a civil proceeding. Meanwhile, the Republic of Armenia General Prosecutor Aghvan Hovsepyan was aware of the decision to dismiss the case: even the Board of the General Prosecutor's Office discussed that decision.

We do have certain information regarding the person behind Grigor Igityan, which we are still checking and will publish the information provided by our sources. One thing is clear; the person behind is so powerful that even some officials at the Presidential Administration fail to use their influence.

To recap, the following was ascertained through investigation:

In December 1998, a US citizen, George Najarian wired $35,000 USD to the personal bank account of Sonya Tashchian, the widow of David Davtian who was the owner of Hayk - 95, LLC, and Shant - 94, LLC, for the acquisition of the land plots located at Dzoragyough 4, 11 and 12. Sonya Tashchian and the two other owners of the companies confirm the fact. The transfer of lease rights over these properties was made through a change of share ownerships in the companies, since, as George Najarian has provided, Grigor Igityan assured him that as a foreign citizen he could not own land and real estate in Armenia . Grigor Igityan and Gourgen Melikian, a friend of George Najarian, became 50% shareholders of Hayk - 95, LLC and Shant - 94, LLC. Manuk Manukian, the 50% shareholder in Hyetechlazer, CJSC, gave up his rights over the land plot of Dzoragyough #4 in favor of George Najarian. After that, through the initiative of Grigor Igityan, Gourgen Melikian gave up his shares in Hayk - 95, LLC and Shant - 94, LLC, and Grigor Igityan became the sole owner of the companies. George Najarian started the construction of the two buildings on the land plots, assigning the supervision over the construction to Grigor Igityan. George Najarian opened an account in Midland - Armenia Bank granting Grigor Igityan an access to it. Grigor Igityan would withdraw the funds wired by George Najarian from the account and would spend the amounts necessary for the construction activities.

Construction of the buildings of Dzoragyough 4, and 11/12 started and continued under the supervision of Grigor Igityan.

In 2002, Hayk - 95, LLC and Shant - 94, LLC were renamed Hayk - GZI, LLC and Shant - GZI, LLC. In May, Grigor Igityan registered the two story, half constructed building and the land of Dzoragyough #11/12 after these companies.

Grigor Igityan gave his wife, Susanna Hakobyan, a power of attorney to act on behalf of Hayk - GZI, and Shant - GZI, and in June 5, 2002 acquired from her the building and the land of Dzoragyough #11/12 paying 1.125,000 drams (an equivalent of $2,250 USD).

In June 3, 2002 , Grigor Igityan acquired from Manuk Manukian, the director of Hyetechlazer, CJSC, the haft constructed building and the land of Dzoragyough #4, and paid 100 000 drams (an equivalent of $200 USD). After registering the buildings and the lands of Dzoragyough ## 4 and 11/12 under his name, Grigor Igityan terminated Hayk - GZI, LLC and Shant - GZI, LLC.

In November 2002, when the construction of the two floors of each building was completed, George Najarian assigned the supervision of the construction to Grigor Nazarian, a US architect. Under Nazarian's supervision the construction of the third floors of the buildings and the inside finishing of Dzoragyough #4 was completed.

After receiving a special residency status in the Republic of Armenia , George Najarian approached Grigor Igityan with a request to transfer him the ownership of the properties. Grigor Igityan refused stating that the properties were built by his own funds.

In January 27, 2004 , Grigor Igityan signed a contract selling the building and the land of Dzoragyough #11/12 to Hambartsum Galustian for 348.000,000 drams (equivalent of $600,000 USD). For the time being we will refrain from naming the person behind Hambartsum Galustian. Galustian serves at the Military Police, he is a dentist, and obviously does not have that much money. He mentioned during the meting with us that some friends of his father were partners with him, but declined to identify them.

Materials of the case provide that the investigators ascertained the following:

1. Grigor Igityan withdrew $242,902 USD from the bank account owned by George Najarian. The amount was either entirely or partially spent for the construction of the buildings of Dzoragyough ## 4 and 11/12. George Najarian spent an additional $138,000 USD on the construction of the two disputed buildings.

2. Receipts taken by Grigor Igityan from persons to whom he gave money under instructions by George Najarian provide that the amounts come from the photo business, that is, the funds not owned by Grigor Igityan.

3. Grigor Igityan provided a power of attorney to his wife on behalf of the legal entity he owned, and the wife sold to "Grigor Igityan" the individual the property owned by the legal entity, the property being a subject of a dispute.

4. Grigor Igityan informed the persons involved in the construction that the construction was being financed by George Najarian, demanded and received evidently false receipts from the persons involved in the construction. The volumes of construction works and amounts paid against the works in these receipts were inflated for the purposes of submitting them to and extorting excessive amounts from George Najarian.

5. Grigor Igityan sold one of the buildings under the dispute and received $600,000 USD without notifying George Najarian, that is, Igityan secretly embezzled Najarian's property.

6. Grigor Igityan gave contradicting testimonies regarding his financial sources of hundred of thousand US dollars and about investing them on the real estate being subject of a dispute. Only at the end of the investigation he mentioned about valuables and paintings inherited from the relatives of his wife and said that the part of them were still available in his apartment. That statement was refuted through the search conducted by the investigators at Igityan's apartment. The search determined no valuables, paintings or similar items in the apartment. Nevertheless, in a few month time, by an apparent attempt to confirm Igityan's statements, investigators said that an expensive painting was available at Igityan's apartment, with no explanation, whatsoever, that the painting was not found during the search conducted earlier for the purposes of determining the existence of such valuables in the apartment.

While the investigators ascertained all the mentioned above, they still came up with a decision to dismiss the case. And while the investigators ascertained almost everything necessary for the case, it is clear that the case was dismissed by an order from somebody.

Gurgen Melikian met George and Carolann Najarians in 1989. Shortly after they became close friends. Gourgen Melikian is the Dean of the Faculty of Oriental Studies of Yerevan State University. He is also the Representative of Armenian Health Alliance founded by Carolann Najarian. The organization has offices in Gyumri and Nagorno Karabagh. One of the buildings on Dzoragyough was designated for the offices of the organization. In his statement to the General Prosecutor's Office Gourgen Melikian said the following: "Few years ago, during George's visit in Armenia , I became aware of George's intention to obtain land plots in Armenia , and since Igityan told him that foreigners can not own land and real estate in Armenia , he offered me to register as an owner of the two land plots. When I agreed, George told me that his representative G. Igityan will take care of all the issues in that regard. Igityan took care of all the documents and filings for the properties. I never attended any state, governmental, local government, or notary offices, however, I did sign some documents provided to me by Grigor... After some time, Igityan told me that George wanted to register the land under Igityan's name and asked for my passport to make the registrations. Later, after the relations between Najarian and Igityan deteriorated, during a conversation with George Najarian I found out that George never gave Igityan such an instruction... In June of 2003, during his visit in Armenia George's wife Carolann offered me to visit the two Dzoragyough buildings constructed by George's money and said that she provided the first floor of one of the buildings to Armenian Health Alliance for an office, and that she wanted to use the other building as an apartment. Carolann never mentioned anything about the buildings or any part of them being owned by Grigor, and for a long time I knew that the construction of the buildings was being financed by George from the beginning up until that time..." Gourgen Melikian made this statement in February 10, 2004 .

Eduard Korkotian, the director of E. Korkorian & Enkerner, LLC provided the following in his February 12, 2004 statement to the General Prosecutor's Office: "...I have been managing and supervising the construction of the buildings of Dzoragyough ## 4, and 11/12 through private workers starting from May 2002... I have been aware that the construction is being financed by Najarian, while Igityan would always complain that Najarian would delay the payments every time."

While clarifying the issues of receipts in the same statement, Korkorian provided the following: "Thus, in reality I received $18,643 USD and $36,450 USD from Igityan, that is, $55,093 USD in total, while he submitted $97,793 USD worth of expenses to Najarian. Now I understand he tried to conceal through me the money he embezzled from Najarian..." Korkotian also added that he had the copies of hand - written lists made by Igityan for the expenses, with schedules of all payments and identities of the payers.

After deterioration of the relations between Najarian and Igityan, Korkorian continued the works under the supervision of Grigor Nazarian, a US architect and George Najarian's representative. Korkorian received through Nazarian and spent $312,000 USD.

Zenon Sarkissian, an engineer at Taron, LLC, provided the following in his statement: "An act of completion of construction works on the building #11/12 was prepared for the amount of 690,000 AMD (equivalent of $1,380 USD). That amount was significantly lower than the amount of work we performed and also did not match the amount we agreed previously, but Igityan, referring to some financial difficulties, asked us to compromise, that is, lower the volume of the work performed, provided that in upcoming documents the volumes of the works performed and the amounts to be paid shall be made up. Nevertheless, he rejected the acts of completion we submitted later refusing to sign them, saying that Najarian was supposed to make the payments, although our contract was with him. It is also typical of Igityan trying to isolate us from Najarian as much as possible, asking not to approach Najarian or disturb him. He warned us a few times not to speak about construction expenses in the presence of Najarian, not to answer Najarian's questions regarding the amounts paid, and not to complain to him."

Zenon Sarkissian further describes the way they worked, the way they acquired construction materials, while payments being a problem all the time. "For the purposes of being paid for the work performed we requested Igityan to call Najarian in our presence and ask for our payment. He said he would think about it, then he called us after a while and stated that if we want to get the money they owe to us, we should sign a certificate about the amounts received, only after which he can extract the amounts from Najarian. He said that the certificate was prepared only for the purposes of submitting it to Najarian, so that the payments can be made as soon as possible, and that it was not a receipt and that we should not be concerned about it. He emphasized that otherwise we should forget about any compensation for the works we performed. After long persuasions by Igityan we signed a certificate as if we received $117,539 USD from Igityan for the construction works performed from May 2001 until March 2002. We were forced to signed that certificate... After getting the certificate Igityan would use every opportunity to disqualify the work we performed. The impression was that he was trying to get rid of us by all means, since even after signing the certificate he did not do what he promised to do and did not pay us. We decided to stop the works, and our relations got even more tense and he assigned the works to other constructors. Then we realized the purpose of Igityan's tricks, that is, to get rid of us without paying."

Zenon Sarkissian ends his four - page statement with the following: "Thus, he lied to us many times, he did not pay for the work we did, therefore, we demand to hold him responsible and compensate our losses."

Manuk Manukian, the director of Lazertech CJSC also made statements to the Prosecutor's Office. One of his statements, dated February 16, 2003 , provides the following: "Igityan arranged the documents for the construction works on the land owned by our company, George financing the construction works. I emphasize that I never provided the seal of Hytetechlazer to Igityan and he could not have approved any document without me. I was informed only during a meeting at the Yerevan City Prosecutor's Office that Igityan was the buyer under the agreement to sell the building, while he would assure me that he was merely acting as George Najarian's representative during the time of signing the agreement. I would also like to note that my copy of the agreement does not have Igityan's signature on it, although the agreement was approved by the notary, and Igityan was trying to convince me to let him add his signature in the agreement, which I agreed to do only in the presence of a notary public. He also requested not to show the document to anybody. Thus, I now realize that the power of attorney give to Igityan by George did not authorized Igityan to dispose any fixed assets and thus, he did not have any right to register the assets under his name, therefore, to make it happen he fraudulently extorted the minutes of the board meeting with my signature from me."

To the question regarding the financing of construction works on the land Manukian provided the following: "Funds were provided by Najarian, that issue was discussed in the presence of Igityan many times, and that issue was also specifically emphasized in my disclaimer provided in 1999, which said that the buildings were being constructed under the financing from Najarian. As the director of the company I have repeatedly asked Igityan to register the construction expenses in the books of our company, but he would refused saying that he was accountable only to George as a financier. Financing the construction by George was confirmed by Igityan himself all the time."

"One of the specifics characterizing Igityan was the fact that he misappropriated the expensive computer sent by George for the needs of our company, instead he purchased locally and gave me a second class cheaper computer" provided Manukian in his statement.

"Grigor Igityan embezzled George Najarian's property through fraud and abuse of trust. Igityan deliberately distorted certain facts and made up false statements instead. Specifically, the decision provides that the reason of limited liability companies having two participants was that the local law required so, whereas, in 1999 and afterwards no law required so. Igityan acquired the shares of Melikian, the other shareholder in the companies, through fraud, by misleading Melikian as if Najarians expressed such a desire. In this particular case the investigation failed to ascertain the reasons behind Melikian's giving up his shares in the companies" says Ashot Poghosyan, the legal representative of Najarians.

According to Grigor Igityan, he proposed to Najarian to become a shareholder in Hayk and Shant companies and build in Dzoragyough. However, the materials of the case provide that in December 12, 1998 George Najarian paid $35,000 USD to Sonya Tashchian for obtaining the rights over the lands of Dzoragyough ## 4, 11 and 12 without any participation and knowledge of Igityan.

Igityan told Najarian that there was a risk of losing the rights over the land plots in case of not acquiring the title of the lands, and taking an advantage over the law prohibiting foreign nationals to own land in Armenia , Igityan registered the title over the lands and the buildings under his name.

The fact of embezzlement of Najarians' property by Igityan has also been confirmed by Igityan's own testimony, according to which Najarian was supposed to become a shareholder in the business, while there was no written or oral agreement made between the parties regarding the joint activities in the construction in Dzoragyough, including the shares in investments, shares and disposal of the result that business, says Ashot Poghosyan.

Meanwhile, Igityan said the following in his statement to the Yerevan City Prosecutor's Office in November 7, 2003 : "Coming from the years long business and friendly relationship and mutual trust, we have decided to build ## 4 and 11/12 together with Najarian and use the buildings for a business we have not yet determined since we did not know what the market demands would be at the end of the construction. Therefore, the amounts of the bank account #60 were spent for the requirements of that time, including for the construction of the buildings. I can not say certainly how much I spent from the account #60 for the construction purposes, but approximately that amount could make from $140,000 to $150,000 USD. According to my approximate calculations, however, the overall expenses ... on the buildings ## 4 and 11/12 made about $300,000 to $320,000 USD..."

In the same statement Igityan added the following: "I hereby state that after making a final settlement of accounts with Najarian I am ready to discuss the issue of returning the building #11/12 to Najarian. Since that would also mean a cancellation of our mutual business plans I reserve a right to demand from Najarian a compensation for organizing and implementation of construction works. As an answer to your question I hereby provide that the reason of the buildings being registered under my name does not have any significance in the circumstance of our doing business together, which is the reason why Najarian instructed Manukian to register the building #4 under my name. I also provide that I will make a written offer to M. Manukian, the director of Hyetechlazer, CJSC to enter into termination of the sales agreement for the building #4, as provided under the law. This shall prove that there was no deliberate intent in my actions."

This statement was made to the Yerevan City Assistant Prosecutor A. Stepanian in November 7, 2003.


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