Justice Department seeks forfeiture of Los Angeles mega-mansion allegedly purchased with proceeds of Armenian corruption scheme


Date: May 5, 2022

Contact: newsroom@ci.irs.gov

LOS ANGELES — The United States is seeking the forfeiture of a more than 30,000-square-foot mega-mansion in the Holmby Hills neighborhood of Los Angeles, pursuant to a civil forfeiture complaint that alleges the mansion was purchased with bribes paid by an Armenian businessman to the family of Gagik Khachatryan, a former high-ranking Armenian public official.

Khachatryan who was known as the "Super Minister" because of his significant responsibilities, served as chairman of the State Revenue Committee of the Republic of Armenia from 2008 to 2014 and as minister of finance for the Republic of Armenia from 2014 to 2016. In the complaint, which was filed Monday in federal court in Los Angeles, the United States alleges that businessman Sedrak Arustamyan paid Khachatryan and his family more than $20 million in bribes in exchange for favorable tax treatment of his businesses. The bribe payments allegedly were used to purchase the Holmby Hills property, which had been recently listed for sale for $63.5 million.

Khachatryan and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia. Criminal charges are also pending in Armenia against Arustamyan for paying bribes.

This matter was investigated by the FBI's Eurasian Organized Crime Task Force (EOCTF) and the United States Marshals Service. The Republic of Armenia's Prosecutor General's Office and National Security Service provided critical assistance. The EOCTF is composed of multiple law enforcement agencies including the IRS Criminal Investigation, FBI, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff's Department.

Assistant United States Attorney Maxwell Coll of the Asset Forfeiture Section and Justice Department Trial Attorney D. Hunter Smith of the Kleptocracy Asset Recovery Initiative of the Criminal Division's Money Laundering and Asset Recovery Section (MLARS) are litigating the forfeiture.

A civil complaint is merely an allegation, and the government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.