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Corruption in Armenia: Esti Hametsek…
The aerial view of the plot in question
BY OSHIN PEROOMIAN
In what I can only characterize as the twisted modern-day version of “Gikor”, our honorable President, Serg Sarkissian, has repeatedly asked the diaspora to come and invest in the homeland and have an input in making Armenia a prosperous nation. For all those brave souls that are actually considering heeding the president’s call and do not have “friends” in the highest of places in the government of Armenia, I simply offer a story which should give some pause.
In the fall of 2005, I bought a 2,500 square meter land on the hills overlooking Yerevan (in Nork). I purchased this land from Mr. Andranik Ghulijanyan for a total sum of 88,000,000 AMD (about $195,000 at that time). The original lot size owned by Mr. Ghulijanyan was 5000 square meters. Since, I did not want to purchase the entire lot, I requested that Mr. Ghulijanyan split the parcel in two halves so that I could purchase only half the land (the amount I could afford). Mr. Ghulijanyan filled out the proper paperwork at the Republic of Armenia’s (RA) Kadatsr in Yerevan, which is the government body responsible for issuing deeds in the RA, and requested that the deed be separated into two. After doing their due diligence, the Kadastr split the original deed and issued two deeds each for 2500 square meters. As a side note, the RA Kadatsr would not have completed this process if there were any leans or judgments against this parcel of land.
After the Kadastr issued the two deeds, with the help of my lawyer in Armenia, we completed the transaction via notary public and recorded the transaction with Kadastr. The RA Kadastr issued a new deed listing me as the titleholder for the 2500 square meter parcel. To this day, no state official has called into question the legitimacy of my transaction and the deed that I hold. This is an important fact to keep in mind as you read the rest of this story.
In fall of 2006, a few months after my family and I moved to Armenia, I got a call from the Nork-Marash courthouse inquiring as to why I had failed to appear in court. I had no idea what the phone call was about so my lawyer and I headed to the courthouse to ascertain the reason for the verbal summons (verbal summons are illegal in Armenia). To our surprise, we found that the city of Yerevan had taken Andranik Ghulijanyan to court for not properly paying for the 5000 square meter land, which he had originally bought from the City of Yerevan. Since Mr. Ghulijanyan no longer owned the entire piece of the land, I was subsequently included as a defendant in the civil trial. In fact, not only was my summons to court done verbally, the civil charges against me were also entered verbally (both strictly against the rule of law in Armenia). The judge simply saw fit to add the changes against me midway through the trial based on a verbal request from the attorney representing the city.
The laws (in Armenia) are very clear in this matter. I did not purchase my land from the city of Yerevan; and, when I purchased the land, Mr. Ghulijanyan was the rightful owner of that land. My transaction with him followed the letter of the law and thus the only recourse for the city of Yerevan was to sue Mr. Ghulijanyan for the money they were owed for half the land (my half) and request his portion of the land to be returned. As a bona fide purchaser, there are several statutes (in Armenian law) that protect my purchase. The city officials had written in their brief that since they wanted the original purchase agreement of the land with Ghulijanyan nullified, it should follow that I my purchase agreement be nullified as well. Clearly not the case under Armenian law!
During our civil trial, it became clear that a group of people (kadastr employees, bank employees and other officials and civilians) had been arrested for falsifying documents and receipts and pocketing the money that was to be paid into the state treasury for the original purchase of the land (when Ghulijanyan purchased it from the city). It turned out that over a hundred transactions of this type where conducted with a massive loss to the state treasury. The state had started criminal proceedings against the aforementioned group and had seized all their assets. I will not get into how those assets were auctioned off and how much money was actually put into the treasury since no one can actually give the correct number. The items auctioned off were at pennies on the dollar and probably made the corrupt officials handling this case even richer than they should be!! The president of Armenia, at that time the honorable Robert Kocharyan, had come up with a “kam hoghe kam poghe” policy and ordered every one of these landowners (whether complicit or not in the criminal activities) be taken to civil court. It was clear from the judges manning these trials that a fair trial was not going to be possible. In nearly all the cases, the civil defendants were forced to pay what was owed to the state a second time, even “defendants” that were bona-fide purchasers who did not purchase their parcels from the city. Again, I don’t think anyone knows exactly by how-many fold these payments exceeded the original “loss” to the state budget. I was one of the lone holdouts. The lawyers from kadastr and the city said that this would simply go away if I paid what was owed to the city. It really didn’t concern them that I had rightfully purchased the land (and not from the city) and that I had paid much more than the 33,000,000 AMD that the city was asking for (the total sum was 66,000,000 for the 5000 square meter land).
In my original trial, the judge was very prejudicial and did not even want to consider the fact that there were people being held on criminal charges in this matter. Armenia law clearly states that criminal proceedings in a given case supersede the civil proceedings because any evidence and convictions stemming from the criminal trial will have a direct consequence and relevance in the civil trial. The judge did not see it that way and did not want to postpone the trial until the end of the criminal proceedings. We questioned the judge’s impartiality and made a formal request for his removal. The court magistrate, by law, had to take the matter under advisement and notify us in writing whether our request would be granted. About 15 days after our request, my lawyer called and said that he had “heard” that the judge was going to announce a verdict in my case the following day. I was completely shocked. Well, I shouldn’t say that since someone who has lived in Armenia as long as I have, rarely gets shocked at anything anymore. We showed up the next day at the courthouse and the judge was clearly surprised to see us in the courtroom. In fact, none of the other parties were in court. He read the verdict and literally ran out of the courtroom afterwards. We asked the court clerk about the response to our request for the removal of the judge and she handed us the refusal letter after the verdict was announced.
Under Armenia law, one has 15 days to appeal court rulings and we went ahead and appealed the verdict. The case got assigned to the Appeal’s Court (civil division). As an American citizen, I also notified the American Embassy about the “troubles” I was having with the judicial system in Armenia. The Embassy was extremely helpful in many ways. They offered to be at the appeal’s court proceedings and to write letters on my behalf to the Foreign Ministry of Armenia. At the first court session in the appeals division, we asked the three-judge panel to postpone the trial until the end of the criminal proceedings in this matter. The judges said that they would issue their ruling on that motion at the next session. I was very sure that the judges were going to rule against us so I asked the embassy if they could have an official present at the second session. Mr. Jeff Gringer, the deputy consul for the US embassy in Yerevan, agreed to come to the trial. As the session began and we introduced the people in the courtroom (including the deputy consul), pandemonium broke out in the courtroom. What could only be described as a scene from a badly adapted John Grisham novel, the judges called a 15 minute recess and the Kadastr and City lawyers started frantically talking on their cell phones. The court was called into session 20 minutes later and the judges agreed to postpone the trial and grant our motion. I wonder what would have happened if the ambassador had shown up at the trial (although we did not have an ambassador to Armenia at that time).
Fast-forward a few years to the fall of 2010. The criminals were tried and convicted. The state, in their criminal case, had clearly shown that the convicted were the ones who had defrauded the state. So, with the criminal verdicts at hand, our trial began once again. Even if the other laws that I mentioned in the beginning of the article were not enough, now the judges had criminal verdicts in their procession clearly showing who was to blame for the fraud perpetrated on the city. As the case proceeded, it became clear that once again this panel was not going to be impartial. After hearing all sides, they announced that they were going to issue their ruling at a specified date. We went to the courthouse on that date in order to be present while they read the verdict. In a twisted version of “the dog ate my homework” excuse, the judges told us that they had issued the ruling but the computers were not cooperating and they couldn’t read the whole statement of the verdict. My attorney asked if they could read the main ruling (whether they upheld the lower court’s decision or not) and that we would pick up the full text of the ruling at a later date. The lead judge on the panel said that the pages were out of order in the document and the whole computer system was on the “frits”. The computers seemed to be working properly for all the other rulings that they read before they got to ours. I have too much respect for kangaroos to use their name to describe this court. The lead judge said that we should come back in a week and they would read the verdict at that time. A week passed and we were notified in court that the panel had decided to restart the proceedings, the same panel that claimed that they had reached a verdict but couldn’t read it because of issues with their computer system.
In this next “phase” of the proceedings, the judges tried to see if someone would come forward and pay the amount owed to the city so that the matter could be “resolved” via settlement. After exhausting these options, the judges began with a sharp line of questioning for the lawyer representing the city of Yerevan. One judge actually asked, “Did the city sell land to Oshin? No! So why is the city asking for a land which it did not sell to Oshin”. We were surprised that the judges were taking our side and it was refreshing to see them follow the rule of law. We have the official audio-tapes from the trial where the judges harshly criticize the city attorney and tell her that their case is without merit. They essentially say that the correct course of action for the city was to sue Mr. Ghulijanyan asking for monetary compensation for the part of the land that he no longer owned and that I should not have been even included in this trial. The lawyer from the city is heard at the end of the tape saying, “The money owed to the state MUST be paid and we really don’t care who pays as long as it is paid” clearly showing the states intentions in the case (Kam hoghe kam poghe!). All indications were that the panel was planning to overturn the lower court’s verdict,….until the verdict! Clearly there had been pressure from the highest reaches of the government as is the case with nearly all matters involving the people vs. the state or the city. In fact the judges didn’t even read the verdict in court. The secretary gave us the ruling outside of court and said “Sorry, we did everything we could”. The ruling basically upheld the verdict from the first court.
We appealed this ruling to the highest court in the land dealing with such cases, the “Vechrabeg” court.
Today, October 3, 2011, I got a formal letter from the “Vechrabeg” court that it had refused to even hear my case, exhausting all options open to me within the boundaries of the RA. In their letter of refusal, there is absolutely no reason given for their decision.
In all the verdicts handed down so far in this case, none of the judges indicate what law I have broken during the purchase of the land and under which statute I must forfeit the land (because there are none!). Even the judges on the audio recording ask the city attorney “Under which statute are you asking for the forfeiture of Oshin’s land”.
I love my country. In fact, very few have made the decision that my family and I have made, leaving the “good-life” in LA for a better-life in Yerevan. My third child was born in Yerevan, and I am proud that I live in my homeland and contribute to its hopefully prosperous future (in my own way). However, the so-called sovereign judicial system here has left me no choice but to seek justice outside the boundaries of the RA. My next stop in this journey will be the European court.
We often here that the system is simply broken in Armenia and corruption runs rampant. Everything can be bought since everything is up for sale. Well, everyone who has worked and lived here has stories just like the one above, which go a long way to prove that premise.
Oh, what would Gikor think…
Wow why is every one being so hypocrit of what happen to this guy, things like these but in a diferent way happens in the USA look at it like these how many realtors sucked people into loans and than they lost their homes how many realtors are behind bars in the USA because of fraud and bad business practice and all of the sudden this guy got taked for a ride and you peoples heart starts bleeding he should of went thru the right channels . yes dont get me wrong things are diferent in Armenia as they are in the US or elsewere in this case, so jumping right away and being a critic of the homeland is very wrong and i wont be surprised if ANCis not involved in these case, and want to put to shame our homeland people wake up and look around you, there are 14000 Armenians in the US jail system yet no one is doing anything about making our comunity a better place every one out to get the other person, wake up people look around us, why would you just be a critic of something that happen in Armenia and start talking crap about it, did any one asked the guy were he got hismoney and how he got it, and i’m sure he didntmake that money from selling sujux basturma or baklava.
I don’t understand this constant drumbeat about ‘Western Armenian’ investors presumably bringing big dollar projects to Armenia. Apart from Ralph Yirikian and Eduardo Ernekian, who else is there to speak of ? The latter, btw, demanded and received major tax concessions from the government before so much as lifting a finger.
Russian investments make up over ½ of the large cash infusions going into Armenian economy. Whether by a state-owned company or Russian nationals of Armenian descent is immaterial.
Why is it that whenever a ‘Western Armenian’ spends a couple bucks to start a shish kebab stand in Yerevan, the rest of the Hayastanci are supposed to be jumping up with joy ?
It was different in the day of the KGB agent LTP when poverty was savage, and most people were eager to work for a miserable $100 a month.
Today Yerevan boast a Stefano Ricci boutique where for a mere $40 thousand, locals can purchase a crocodile jacket.
I am so surprised you guys think it is simple to buy a land or establish business in Armenia and successfully run it. I am Armenian and live in US for over 15 years, but I came back for 4 years trying to see if our country truly changed and we all can function as we function un US society. Unfortunately corruption is sponsored from the top and I simply returned to US thinking that my family and my health is more important for me. Living in Armenia and dealing with corruption, rude and bribed government officials is a hassle. You never have any guarantees in Armenia for anything unless you know someone in the ruling party or government. The whole system is a mess, it is a mafia run by the presidents(All of them including Ter Petrosyan). Very few honest and good people in Armenian government and they usually in places where there is few opportunities for corruption. I would state that 90% of all Armenian officials are corrupt. The country took advantage of all of us who came back and tried to open businesses or help. This government does not with our help, but people and country does. So, the issue here is to figure out how to help country, but harm deeply corrupt government.
ALL these small countries are corrupt- whether they be in Europe or most any other place. Including the US- we just have a better checks and balances system and free press to weed things out. The people are desperate for money- and they’ll steal, lie, and cheat to get it. Even if it means endangering the Diaspora efforts to rebuild our beautiful nation. I love Armenia, but if the officials don’t stop this gangster mentality, we will no longer have a homeland to call our own. Astvatz help us…
We believe and we portray ourselves as Europeans because we celebrate Christmas and New Year’s. Sorry guys, but the truth is, we are light years away from having European behavioral habits.
The following short story is one example to demonstrate how small things may mean a lot. Last June I was catching a plane in Geneva en route to Spain then to Paris and Yerevan. It was an early morning EasyJet flight, and the security gates were still closed. However, there were already 50 to 60 passengers there, waiting for the gates to open. There was no distinct line-up and the people were loosely scattered over a large area. New passengers joining the group were simply stopping and dropping their bags at the boundary of the waiting area. Although there was no queue, not a single person attempted to walk straight to the gates. When the gates finally opened, there was no stampede to get there first, no pushing and shoving, no rudeness. I was flabbergasted by the calm and the order of the entire well-mannered operation.
A few weeks later, arriving in Yerevan via Paris, there were 2 planes arriving almost at the same time. My flight was Armavia with 8 people on board, the other was Air France with about 200 people on board. Soon the scene at the arrivals area was transformed to something like a noisy street demonstration. You could hear people shouting and yelling as the herd approached the escalators at the mezzanine level. Then the rushing, pushing, shoving and trampling started, not just by the young, but also by baby-boomers, all freely contributing to the locomotion and adding to the high volume of noise. No matter how many people were lined up in the zig-zag, all wanted to get to passport control before the person standing in front of them. Since most of them didn’t need visas, I assumed them to be well-off locals who could afford travelling to France, or French Armenians bearing Armenian passports. I was flabbergasted a second time, that those of us who were borne and raised in Europe, didn’t pick-up something small from the European environment.
Queuing displays the image of respect you bear for the “rights” of your neighbor.
Queuing is non-existing in Asia and Africa…..
As for the “rights” of Mr. Oshin in Armenia, clearly the City representative didn’t care about “who would pay for the land”, as long as somebody paid for it. He didn’t care about the law or Mr. Oshin’s “rights”. Probable translation: some corrupt higher-up official had put his name on the money to be collected.
Last but not least, about those who blame the Soviet era, the young age of our republic, about people who do not want to give a chance, etc. to explain the corruption phenomenon in Armenia; my opinion is that we only have to blame ourselves. During my 2 previous visits, I have spoken to numerous people from all walks of life. I have spoken to and dealt with people who were borne since 1990 and before, and have come to the conclusion that all people in Armenia behave in the same manner, the man on the street is no different from the people in power. The psychology of lawlessness, of cheating, grabbing and deceiving has been imbedded in the behavior of all Armenians. Sadly, this lawlessness is practiced upon our own brothers and sisters, locals or diasporans. Some people have given up hope that this will ever change.
Finally it is a fact that lawlessness is holding back numerous baby-boomers who would be more than willing to help, by bringing their knowledge and know-how, and spending at least 6 month/year in Armenia. I remain optimistic that the Minister of Diaspora will reach out to all Armenians who are willing to build and live in a society of law.
Just need to reiterate Sonia’s point: “…writing an article like this in a diasporan publication which taints the mind of 1,000’s of hopefuls or the possibility of business venture or repatriation in Armenia is poisonous.”
While this is terrible and discouraging for any Armenian to hear anywhere in the world, I still have hope… if we are looking at Armenia as a new nation, just gaining its independence and still in a period of transition, we can’t look at it as the ancient Armenia we have learned about in hayots badmoutyun. It’s going to take time and effort to rebuild the nation and find ways to enforce the laws. There are tons of crooks in Armenia and at least we know it, it’s not a ponzi scheme or mortgage fraud like things we hear about in the States. It would be great to hear success stories and have case studies on this stuff to help out future investors and outline some strategies. We have quite a ways to go and it’s not going to be easy but we shouldn’t give up.
Dear Caroon;
“Find ways to enforce the laws?” That is very interesting; those ways are not lost; it is right there in the constitution:
Judicial independence (also known as the independence of the judiciary) is the idea that the judiciary needs to be kept away from the other branches of government. That is, courts should not be subject to improper influence from the other branches of government, or from private or partisan interests.
I really understand the pain this guy is going through. Let me very briefly tell you another story related to the judicial system in Armenia. An Armenian/American by the name of Hrayr Aganikian (US Citizen), who devoted his life to Armenia since the beginning of the Artsagh war, is now in prison. This is the reason.
Few years back, some people have borrowed money from him to open businesses. Combined, about $100,000.00. When the time came to pay him back, those individuals paid a portion of that money to corrupt investigators and a corrupt prosecutor so they bring up fabricated charges against him. Mr. Aganikian had many notarized and legal papers regarding the business transactions but nothing helped. The judge (just as corrupt as the investigators and the prosecutor) found him guilty on different charges and gave him 9.5 years in prison. Not only they took his money but also sent him to prison for almost 10 years. One more thing. When he gets out, they have put about $80,000.00 as different penalties and fines.
The case went to the “Court of Appeals” – (Verakknich – in Armenian).
With more evidence and testimonies provided by Mr. Aganikian, the judges did not change the verdict. He has one last hope with the (Vchrabek Dataran – in Armenian) which should be within the next few months.
Of all the give and take I read here what “Rodney Surewood” said made the most sense. I am very upset at Asbarez for getting into the business of airing dirty laundry. This is not a “news” item; this is one man’s claim. He may or may not be right and I don’t care who he is. Frankly, I am not impressed with most diapsorans who think the Armenian nation owes them something for having visited there or moved there. Be humble. Be respectful. Be genuine. Don’t keep bad company. Know who you are dealing with. Know the nature and the character of the fledgling nation. Don’t over bite and you’ll do well in Armenia. Having said that, these types of problems occur in all nations. Much worst stuff occurs right here in the US. But I don’t see reputable US newspapers discussing it publicly. I have property and some money in Armenia. I have been splitting my time between Armenia and US for many years. Other than small/unessential/petty stuff, we have not had a single major problem there. I feel safer (in all senses of the word) in Armenia than I do in the US. I know of many diasporans who live comfortable lives Armenia. Many of them have business. And no the “mafia” does not bother them. The mafia bothers those who overextend or play dirty or attract to much attention. Yes, there are problems in Armenia. But what you people are doing here is no way to go about addressing it. All of Armenia’s problems are natural for a post-Soviet nation full of poor people and with no experience in nation building and in the remote Caucasus of all places. All these tabloid types news reports about Armenia are hurting Armenia not helping. Asbarez has to stop participating in the information war being waged against Armenia and go back to reporting the NEWS.
After 32 years living in beutiful Long Island, NY , 3 years ago I left to live and work in Armenia. As a foreigner, you don’t invest, you don’t expand, you just live and try to reduce your expectations and somehow be satisfied.
You can’t have real happy life in Armenia !
The only way in distant future to have normal country depends on diaspora to immigrate and populate this land.
By their presense , honest behaviour, culture and VOTEs , this land might become bearable.
Corruption is in the blood of state employees , disrespect to each other is the rule of survival for local inhabitants.
Sa Hayastann e’ , Du qo tann es !!!
All of the countries in the world without exception are plagued with judicial corruption. The key is a completely open and free market economy. All government services and functions should be privatized. All should be in competition with each other. All disputes should be resolved openly on the internet, where everyone could see. All voting should be conducted on the internet where everyone can follow.
Very easy for a computer savvy people full of i-pads. Kirk Kerkorian alone could finance a system like this if only the voters in Armenia asked for it.
Thanks for posting this article. I have heard similar stories from others. The first step in improving the broken system is exposing the problems. Diaspora is already afraid to invest in our homeland. These articles should hopefully expose the wrongdoers and bring change from the top down. Thanks again for the article.
There are two distinct ethnicities in the world who have a sizable diaspora that are well integrated into their host countries; the Jews and the Armenians. Luckily for the Jewish state, their diaspora generates unbelievable amount of capital and political support to the point that they can dictate the foreign policy of their host countries as is the case in our US of A.
Unfortunately for Armenia, the successive governments in the past 23 years have failed to attract the type of investments from the Diaspora that could have propelled Armenia to the top of the list of the ex-soviet republics. Instead you hear from the state Departments reports that Armenia ranks amongst the worst corrupt countries next to Azerbaijan. Georgia has managed to implement certain policies that has minimized the corruption and they are attracting significant amount of foreign investment without even having a diaspora.
I do not get involved with the day to day politics of Armenia much but I am yet to hear of a success story of a diaspora Armenian, whether from other diaspora countries or Armenia native who have tried Oshin’s experiment and succeeded.
The only success story that I know of today is in the hi tech industry and that is because the officials have not figured out a way to extort the system of custom software development since it does not involve any tangible assets.