Lawyers in Genocide Survivor Benefit Case Accused of Embezzlement
BY GAREN YEGPARIAN
The “committee” that “grants” this award has been somewhat dormant lately. The last time anyone was “honored” with it was 31 months ago. You can imagine the “committee’s” excitement at being able to give two people this award simultaneously! So, it’s possible “it” might be a bit premature in its action. You’ll remember Spit-Rain comes from the Armenian saying, “He’s so shameless, if you spit in his face, he’d think it’s raining.” A person who “earns” a SpitRain, is being called out for his or her egregious doings.
The awardees “earned” SpitRain through actions that occurred roughly a decade ago, but have only recently, formally, been recognized. The setting for this story starts in Sacramento, then spreads throughout the Armenian world. California passed a law enabling the descendants of Armenians in the Ottoman Empire to sue life insurance companies which had never paid on the policies of their Genocide-era predecessors who had bought them. Two successful suits were brought against NY Life and AXA (a French company) before the law was (erroneously, in my opinion) declared unconstitutional by the U.S. Supreme Court in a suit against Victoria, a German company.
Naturally, lawsuits involve lawyers, in this case three: Mark Geragos, Brian Kabateck, and Vartkes Yeghiayan. In both cases, multi-million dollar settlements were secured. The money was to be divided into three “pots”: for identifiable descendants of those who were insured, the Armenian community through qualifying organizations, and the lawyers – for fees and costs. Personally, I don’t think that last one should have been permitted since the lawyers are Armenians, and this is a Genocide related issue. At most, a minimal cost recovery should have been allowed.
But it gets much worse. Infighting began, and the lawyers split – Geragos and Kabateck on one side, Yeghiayan on the other. Embarrassing accusations and mutual recriminations issued from each side of misuse/misappropriation, in various forms, of some of the settlement money. These humiliating (to all Armenians) allegations ended up before the California Bar, bringing us full circle and back to Sacramento. The Bar issued “Notices of Disciplinary Charges” in August against Yeghiayan and Rita Mahdessian (his wife and law office co-worker). There are no actions pending against Geragos or Kabateck at this time.
So the SpitRain duo are Yeghiayan and Mahdessian, with some of the saliva-splatter possibly landing on Kabateck and Geragos, if any of the accusations made against them (as I recall from the hearings I attended a few years ago, these involved extravagant spending of moneys from the settlement fund on “expenses”) are true.
While this award may be a bit premature, given that on January 25 the Glendale News Press published an article, the issue had to be taken up. The item, titled “Husband-and-wife legal team accused of embezzling settlement money from Armenian Genocide survivor benefits lawsuit,” details a California Bar action against Glendale-based attorneys Yeghiayan and Mahdessian for allegedly embezzling funds from a settlement meant to compensate families of Armenian Genocide survivors.
Yeghiayan and Mahdessian are accused of setting up dummy organizations to receive some of the settlement money, and even of paying their children’s law school tuition from these funds. These links will take you to the formal charges.
Yeghiayan and Mahdessian have a “status conference” scheduled for January 30th. I spoke to a friend who is an attorney to understand this process, and here’s what I learned. These types of proceedings start with someone bringing the issues to the California Bar. The Bar contacts the attorneys in question to assess if the allegations are credible or frivolous. If they see that there is some merit, the documents referenced above are filed, the attorneys have the opportunity to respond, then a hearing judge reviews the case with three possible outcomes: reproval (slap on the wrist), suspension (usually a period of months), or disbarment. Currently the charges are “abated” pending the status conferences. Regardless of the outcome, anyone who can show standing, i.e. an aggrieved person, someone who had a stake in this matter and suffered some kind of loss, can take legal action against the individuals concerned.
In all this, one aspect is still missing. No one has addressed the problem of those who applied, but did not receive part of the settlement funds. This occurred with no explanation given. I know this from my family’s experience in the AXA case (let this serve as full disclosure that we applied because my great-grandfather’s brother’s name was on AXA’s list). We were denied. When we tried to at least understand how or why, we were stonewalled, and never got a response from the administrator. Others have had similar experiences. The sum in my family’s case was trivial, but it might not be so in others’ cases. This is fundamentally wrong and should be addressed so that in future, analogous situations, we can preempt and prevent such errors.
Keep watching for developments on this front, but be sure to have antiemetic medication handy.
Vartkes Yeghiayan spent his own money, and lobbied the California legislature to have the laws passed so he can finally make a difference. Why should he not receive some of the rewards? In the USA, if you bring a lawsuit as a whistle blower, the government gives you a handsome reward from what they recover. Why should not the same principle apply to what a lawyer who recovers for the great injustice that was done to us? I have seen many Armenian charities attest that they received money from the settlement. Please show evidence that the Tashnag Party or any other party gave Vartkes financial help when he was risking great financial ruin by spending his own funds for the success of the case, then I’ll accept your criticism.
It is common knowledge that when an Armenian achieves greatness, the level of poisonous anger, envy and jealousy against him rises among Armenian ranks, and in many cases it is organized. Why don’t you write something that changes that part of our character, so that more Armenians in the future will dare to be as courageous as Vartkes, and maybe change our history.
There is more to this story, which one day will come out. Your article is very one sided.
Bravo!
No reason to be emotional or to take sides. The facts will be the facts. I do not think Garen Yegparian took sides. In a departure from his very opinionated columns, Garen approached this story more like a balanced journalist: he spelled-out the facts, as he knows them.
And…Garen did not create this story. The California Bar is looking into this, not a bunch of “jealous Armenians.” When I first heard of this effort, by Vartkes [and others], I was impressed and heartened to hear about it. When they succeeded, I was, again, glad to see some level of justice done. It sounded fair: a third to the attorneys, a third for specific victims, a third for Armenian organizations.
When I heard the terrible charges (a while back)…I was shocked and disappointed. I hope none of the charges are true. Vartkes [and others], as I understand it, got their legal fees covered…among other things. Great. They deserved it. BUT, if what is alleged is true, regarding “dummy organizations,” that would appear to be a problem.
I am waiting for all of this to play itself out. The charges are either true or they are not. I do not see how there can be any grey area whatsoever or any misunderstanding whatsoever.
Let’s hope no one did anything unethical with money directly connected to victims of the Armenian Genocide. No Armenian wants to see that.
My grandfather’s name was on the AXA list as well, with serious amount of money, but my application was not even considered. I didn’t even get a response as denial to be able to inquire about the reasons. Now, the question is: who, among the three lawyers, took and lavishly spent the money that was my grandfather’s blood money?