21 july 2020

Cases of Legalization (Money Laundering) of Property Obtained by Criminal Means in Especially Large Amount, Illegal Enrichment and Abuse of Official Powers by Senior Employees of Judicial Body Detected

Cases of Legalization (Money Laundering) of Property Obtained by Criminal Means in Especially Large Amount, Illegal Enrichment and Abuse of Official Powers by Senior Employees of Judicial Body Detected

The National Security Service of the Republic of Armenia continues consistently the modus operandi of detecting various manifestations of corruption in different spheres of public service and eliminating them and, at the same time, attaching importance to the provision of information to the public to a permissible extent on criminal cases of public interest, informs that, as a result of large-scale operative-search effective measures, investigative and other procedural activities undertaken along with these measures by the RA National Security Service in the criminal case initiated in the Investigation Department of the RA NSS with regard to the cases of abuse of official powers, complicity in the mentioned abuses, official forgery, illegal enrichment, concealment of data subject to declaration, legalization of property obtained by criminal means in especially large amount by officials, a body of sufficient evidence was obtained that the head employee of the judicial body of the RA Court of Bankruptcy, permanently performing the functions of a representative of the government, as well as having the obligation to submit a declaration as a person holding an autonomous position according to the RA Law “On Public Service”, during 2019 increased his property by 12,382,580 AMD, which significantly exceeded his legal income and it was not reasonably substantiated by them, then he decided to give legal form to illegal income by putting them into legal civil circulation

In particular, having close relations with another judge of the same court and the bankruptcy manager A. Kh., who was in a certain dependence on him by virtue of his official position, he received information from the latter on the process of declaring private entrepreneur S. A. bankrupt in the civil case and selling the real estate owned by the latter and his family members in the framework of bankruptcy proceedings.

In order to obtain the mentioned real estate- an apartment located in Kentron administrative district of Yerevan-at the lowest possible price, he, by means of requests and persuasions, incited A. Kh., who was the bankruptcy manager of private entrepreneur S. A., to so that he, by abusing his powers, obstructs the normal process of selling the mentioned apartment through public auction. To this end, in 2018-2019 A. Kh., by abusing his powers as an employee of a non-profit organization, disoriented various persons interested in acquiring the real estate by informing them that the property would be acquired by co-owners, did not allow the potential buyers to participate in the auctions in a legal manner, thereby ensuring that the auctions were not held and, as a result, the artificial reduction of the starting price of the auction for the sale of an apartment from 26.400.000 AMD to 12.382.000 AMD.

In the same period, the judge of the RA Bankruptcy Court, conducting the bankruptcy case against private entrepreneur S. A., being aware that due to the abuse of powers by the manager in the same bankruptcy case A.Kh., obstacles are created for the normal process of the real estate sale process through public bidding, as a result of which the starting price of the apartment is illegally artificially reduced, based on personal interest to fulfill the request of a colleague judge, to ensure the acquisition of real estate at the lowest possible price, using his official position against the interests of the service, not performing official duties, in conditions of non-submission by A. Kh. for a long time of reports on the bankruptcy process prescribed by law, he did not take any measures to suppress the criminal actions of the latter and eliminate their consequences.

As a result of the described actions of the officials and the employee of a non-commercial organization, the judge of the RA Bankruptcy Court by prior agreement with the son of aunt T. M., giving instructions to the latter, as well as providing the necessary information and financial means, ensured his participation in the auction scheduled for 27 September, 2019 for the sale of real estate located on the territory of administrative district of Kentron in Yerevan. According to the agreements reached, T. M., participating in the abovementioned auction, acquired the mentioned real estate for 12,382,580 AMD, entered into a real estate purchase and sale agreement on  8 October of the same year, on the basis of which T.M.’s ownership of the mentioned property was registered, which actually belonged to the judge. Thus, the head employee of the judicial body, by introducing into legal civil circulation 12,382,580 AMD, was able to hide the property obtained by criminal means and the real origin of the funds and avoid the legal consequences envisaged for illegal enrichment, concealment of the funds subject to declaration.

At the same time, factual data were obtained that, continuing the criminal activity at the request of the head employee of the judicial body, the judge conducting the bankruptcy case of private entrepreneur S. A., abusing official powers, with the aim of eliminating the obstacles to owning the mentioned apartment, in particular, the forced removal of the existing property and belongings from the apartment after the eviction of persons living at the specified address during the bankruptcy proceedings, on 6 February, 2020 instructed the manager in the same bankruptcy case A. Kh. to obtain from T. M. the relevant application at a later date, to submit the original to him to attach to the bankruptcy proceedings in order to create a certain basis for further issuance of an illegal judicial act. Fulfilling the judge's request, A. Kh. received the application with the appropriate content from T. M. and transferred it to the bankruptcy judge and the latter attached the mentioned application to the bankruptcy proceedings. In particular, on 6 February, 2020 an application was submitted from T.M., using which a judicial act was actually delivered on February 6, 2020, in which 4 February, 2020 was indicated as the date of delivery and then, on the basis of the above-mentioned judicial act containing false information of the act, on February 6, 2020 a writ of execution was issued by the judge on the obligation to take out the household items (movable property) located in the apartment, being real estate, put up for auction and sold.

As a result of these actions, the normal activities of state bodies and the non-profit organization were disrupted, the rights and legitimate interests of other persons, including a person declared bankrupt, and other co-owners of real estate located in the Kentron administrative district of Yerevan were grossly violated, which entailed grave consequences, namely: real estate was illegally alienated, having a value in an especially large amount, then grounds were created for its unlawful transfer to the possession and disposal of another person.

In addition, sufficient factual data were obtained in the same criminal case that the head employee of the judicial body of the RA Bankruptcy Court, being a person holding an autonomous position and having the duty to submit a declaration according to RA Law “On Public Service”, being obliged in the manner prescribed by law to submit accurate reports in a timely manner, for the reporting period- during 2017-2020- increased his property by 47,581,000 AMD equivalent to 100,000 USD (exchange rate STM 475.81), which significantly exceeded his legal income and was not reasonably justified by them, that is, he got rich illegally. In addition to that, in the declarations submitted for the same reporting periods the head employee of the judicial body of the RA Bankruptcy Court concealed and did not declare the data on property and funds to be declared on especially large amounts, as well as legalized the funds obtained by criminal means in especially large amounts and the right to property. In particular, the head employee of the judicial body of the RA Bankruptcy Court, with the aim of concealing illegal enrichment and the criminal origin of property and funds subject to declaration, by prior agreement with officials being in close relations with him and also holding an autonomous position, having the responsibility to submit the declaration, realizing the fact of the presence of significant funds already declared by the latter, in order to give illegal income a legal form by introducing them into legal civil circulation, proposed to conclude a formal loan agreement for the provision of 100,000 USD, thereby concealing the criminal origin of both the funds and the property right to be acquired as a result of their possession, and ultimately give them a legal form, after which, having obtained the consent of the latter, he entered into a formal loan agreement with the official for receiving 100,000 USD. Then he transferred the mentioned amount to the mentioned person, and the latter, assisting the head official of the judicial body of the RA Bankruptcy Court by removing obstacles to conceal the real origin of the property and funds obtained by criminal means, deposited them into an account specially opened in the bank for this purpose, thereby putting into circulation the 100,000 USD obtained by criminal means and returning them to the same person.

Taking into account the cited sufficient facts, the RA Prosecutor General, being guided by Articles 164 and 175 of the RA Constitution, Articles 51,161,163 of the Constitutional Law the RA Judicial Code, and Article 53, Part 2, Clause 11 of the RA Criminal Procedure Code, he set out a petition the Supreme Judicial Council of the Republic of Armenia to give consent to initiate criminal proceedings against two judges of the RA Court of Bankruptcy and to deprive them of their liberty.

The submitted motions were discussed and satisfied at the sittings of the Supreme Judicial Council of the Republic of Armenia.

On July 17, 2020 a decision was made by the RA Prosecutor General to involve one of the bankruptcy judges as the accused on the grounds of Article 310.1, Part 1, Article 314.3, Part 2 and Article 190, Part 3, Clause 1 of the RA Criminal Code, Article 38-308, Part 2 of the RA Criminal Code, Article 310.1, Part 1, Article 314.3, Part 2 and Article 190, Part 3, Clause 1, Article 38-214, Part 2 of the RA Criminal Code, and the other- on the grounds of Article 308, Part 2 of the RA Criminal Code.

Taking into account that, in compliance with the procedures established by law, the prohibition on the immunity of judges was overcome, the proceeding authority charged the judges and filed a petition to the Court to apply detention as a measure of restraint to bankruptcy judges, which, according to one judge, regarding one of which it was discussed and satisfied.

After preliminary notification of the Supreme Judicial Council in the criminal case, investigations were carried out both in the administrative building of the Bankruptcy Court and at the place of actual residence of the bankruptcy judges, during which certificates of registration of property rights issued in the names of various persons, large amounts in both foreign and national currency, as well as other materials of probative value for the criminal case were found and confiscated.

Complex measures are being taken in the direction of detecting all the circumstances of the case, restoring the violated legal rights and interests of the aggrieved citizen, finding out the full circle of persons who committed the apparent crime, to give an adequate criminal-legal assessment to their action and as a result, effectively implementing the issues envisaged by Article 2 of the RA Criminal Procedure Code.

The National Security Service reminds that back in October 2019, the bankrupt citizen attempted to set himself on fire in front of the RA Government building, complaining about the abuses committed during the bankruptcy proceedings and, the fact of deprivation as a result.

At the same time, the Service informs that based on the requirements of Article 51, Part 7 of the Constitutional Code “the Judicial Code”, according to which actions against a judge in the framework of criminal proceedings are performed with maximum ensuring the confidentiality of the pre-trial criminal proceedings, respect for the judge's authority and independence, excluding any direct or indirect interference in the activities of the judge, at this stage of the criminal case other additional information cannot be provided.

Note: The suspect or accused of an alleged crime is considered innocent as long as his guilt is not proven in a manner prescribed by the Code of Criminal Procedure of RA - by the court decision entered into legal force.