NY Court Fines Ex-Minister $37 Million

Armenia's former envirornment minister Vartan Ayvazian was fined $37 million by a New York court

YEREVAN (RFE/RL)—Vartan Ayvazian, a senior Armenian lawmaker and former environment minister, was ordered by a U.S. federal court to pay more than $37 million in damages to a U.S. mining company that has accused him of corruption.

The Connecticut-based Global Gold Corporation publicly accused Ayvazian in 2006 of demanding a $3 million bribe from its top executives after the Armenian Ministry of Environment terminated the company’s license to carry out exploratory and mining operations at a small gold deposit in Hankavan, central Armenia.

Ayvazian, who was environment minister at the time, strongly denied the allegations, saying that Global Gold was stripped of the license because it failed to honor its investments commitments. Then Prime Minister Andranik Markarian also dismissed the bribery claims.

Ayvazian on Monday dismissed the charges.

The U.S. Embassy in Yerevan took the claims seriously, however, raising the matter with the Armenian government.

In 2007, Global Gold filed lawsuits against Ayvazian and the government with the International Chamber of Commerce and the International Center for Settlement of Investment Disputes (ICSID) respectively. It subsequently settled the dispute with the government but pressed its case against Ayvazian. The company also took  the case to the U.S. Southern District Court of New York.

On September 5, the New York court ordered law-enforcement bodies to seize $37.5 million worth of assets from Ayvazian and transfer them to Global Gold. The order came almost two months after the court slapped the huge fine on the Armenian official.

Global Gold sources say Ayvazian was notified about the verdict before it took effect on August 10 but failed to respond to it.

Ayvazian denied receiving its copies, however. He dismissed the ruling, saying that it can have “no legal consequences” because a U.S. court can have no jurisdiction over Armenian citizens residing in Armenia.

The ex-minister, who now chairs the Armenian parliament’s committee on economic affairs, also again denied ever seeking kickbacks from the U.S. firm. “Let one person say that I demanded a bribe from them so that I can sue them,” he told a news conference. “There is no such person.”

A Global Gold source told RFE/RL’s Armenian service (Azatutyun.am) that Ayvazian was fined by the New York because he was the de facto key shareholder in SHA, an Armenian company that sold the Hankavan deposit to Global Gold in 2004, and guaranteed that the latter will not get in trouble with the Armenian government. The source said that when they signed the takeover deal both firms also agreed to submit to the jurisdiction of courts in the U.S. state of New York in case of disputes.

Ayvazian has denied fully or partly owning SHA. Armenian media outlets have for years linked him with ownership of properties rich in precious and other metals. The Ministry of Environment Protection had considerable regulatory authority over the Armenian mining industry when it was run by Ayvazian.

The investigative online publication Hetq.am reported last year that Ayvazian at least partly owns Bounty Resources Armenia Limited (BRAL), an obscure firm that controls three untapped iron deposits in three different parts of the country. Ayvazian did not deny this. “Let that remain a secret as well,” he said at a news conference in February 2011.

The ex-minister affiliated with the ruling Republican Party of Armenia spoke shortly after it was announced that a Hong Kong-headquartered firm, Fortune Oil, has paid $24 million to buy a 35 percent stake in BRAL. BRAL was apparently set up and granted operating licenses for the three iron mines during Ayvazian’s ministerial tenure that ended in 2008.

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8 Comments

  1. Medzkit said:

    If the charges prove true, I hope the US is able to squeeze every last drop out of him. Armenia needs decent, upstanding people to lead the country forward.

  2. Ray said:

    I say this as an Armenian American.. “These guys are what is wrong with Armenia.”

    There are many people in Armenia who work their butts off trying to survive, while criminals like this guy sit around cashing in on other peoples hard work.

    Once they are done sucking the blood out of Armenia’s resources, they will jump on a plane to Los Angeles to suck some blood out of our American resources. I don’t understand why the US doesn’t do a full background check and drug test before letting these vampires come in?

    I might seem a bit racist by expressing my opinion on this matter, but keep in mind I’m an Armenian American. I went to school, got a job, started a family, and I pay my taxes on time. I just cannot STAND these vultures coming in, stealing money from the US and it’s citizens. I’m sure he doesn’t speak any other language but his native and some primitive Russian. “Enough to get him around.”

    I will conclude by stating this. I am not against immigration, but I am against sending invitation cards to foreigners without a thorough background check and drug test before allowing them to come into the US.

    Obama, fix this issue or get out! Maybe Romney can fix this issue.

  3. ohannes said:

    MR. Ayvazian i don’t know you at all by looking your picture i can see from your eyes
    you are very corrupt man yes you ask the $ 3.000.0000 dollar and this is not
    the first time or the lest time being corrupt it is a worst being corrupt and stupid
    pay the $ 37.000.0000 before you come a international criminal and fugitive

  4. Vazken said:

    Baron Nakhakahe antsyal ourpat garavaragan joghovin khosum er 1-2 million gearaz nakhararnearu masin ou hravirum vor garki kan` orinag dalov bedoutyan michotsnearov tsaz kinov tseark pearvaz searnatsuneare ed nakhararoutyune darpear nakhararoutyunnearu meaghsagtsutyamp partser kinov vajaraz ayin gyughatsinearoun. Headakrgragan e baron nakhakahi achke inchbeas e deasnoum mi kani million krbanaz avazagneare ou chi deasnoum dasnyag millionnear krbanaznearun… gam ayn e vor mear hargarjan nakhakahe vearendrvelou hamar poshi e tapoum hanroutyan achkin gam al shantaj e ir pajine chsdanalu barakayin vdarelou ayt avazagnearoun; ou meank khosoum enk tratsi avazagi masin ? kone na koghanum e yeagri pnagan basharnearen payts meare koghanoum e joghovourti pearanits.

  5. Alex Postallian said:

    Not withstanding,dont you think they should get rid of gangsters in Armenia,they make the country suspect,all over the world.Are you sure these hoods are TRUE Armenians,or impersonations.

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