New Criminal Prosecution: The Prosecutor's Office on the Case of Gagik Khachatryan

By the prosecutor's decision dated August 29, 2026, regarding G.K., the former head of the State Revenue Committee of the RA and former Minister of Finance, the public criminal prosecution initiated on June 7, 2026, within the framework of the criminal case under investigation by the Investigative Committee has been amended and supplemented, and a new public criminal prosecution has been initiated against him.

1. G.K. is charged with receiving a particularly large bribe from S.M., the director of 'Progress Armenia' LLC and 'Local Developers' LLC, and acquiring property in exchange, from 2008 to 2010, for providing general patronage in the exercise of his duties, ensuring that tax and customs authorities did not create obstacles for the companies' activities, avoiding administrative interference in economic activities as much as possible, softening supervisory functions, and making particularly favorable administrative acts in certain cases. In the names of G.K.'s son, G. Kh., two apartments and four parking spaces located at 3 Northern Avenue in Yerevan were registered, while three spaces in the building at 5 Northern Avenue were registered in the names of G.K.'s sons, G. Kh. and A. Kh. To conceal the criminal origin of the properties and give a legal appearance to their acquisition, transactions were carried out with formal contracts of sale, which indicated significantly lower prices than the market value of the properties. Specifically, the total value of the acquisition of real estate based on the formally signed sale contracts amounted to 484 million drams, while the total market value of the transactions at the time of signing amounted to 2 billion 179 million 51 thousand drams.

2. G.K. is charged with misappropriating state budget funds, including a waste of 174 million 581 thousand drams during the construction works of the 'Dilijan' training center. Specifically, from 2011 to 2017, in connection with the reconstruction and provision of the 'Dilijan' training center, a number of contracts were signed by the State Revenue Committee and the Ministry of Finance, of which 21 were with 'Sahakyan Construction' LLC. Of these, 12 contracts included works to clad the center's buildings with travertine slabs 30 mm thick. Execution acts recorded the completion of works amounting to 714 million 451 thousand drams with a total volume of 17506.371 square meters, while the actual volume of completed works amounted to 15411.3 square meters, which is 2095.071 square meters less than indicated in the execution acts. For the 2095.071 square meters of uncompleted works, 85 million 497 thousand drams were paid from state funds, while as a result of the amount paid for each square meter of actually completed works exceeding the average market value, 'Sahakyan Construction' LLC received an additional payment of 89 million 83 thousand drams.

3. G.K. is accused of participating in a scheme for the illegal alienation of property worth 208 million 908 thousand drams belonging to Brusov University. Along with his son A.K., as well as their associated individuals, G.T. and others, G.K. is charged with having acquired property and its integral land illegally through the commission of official powers by public officials. The property was formally acquired in the name of G.K. and A.K., associated with G.T., for 215 million 228 thousand drams, and subsequently, in 2017, under a formal sales agreement, it was registered in the name of G.K.'s son, A.K. Prior to this, an agreement was reached between former Minister of Education and Science A.A. and the rector of the University G.G. to artificially increase the salaries of university lecturers by 25 percent in order to create additional financial burden for the university. To 'restore' the university's financial sustainability, G.G. appealed to Minister A.A., after which a budget loan of 200 million drams was provided under the loan agreement signed between the Ministry of Finance and the university. However, according to the budget performance report, at the end of the year, the amount in the university's budget amounted to 541 million 562 thousand drams. Under the pretext of repaying the loan, however, A.A. instructed G.G. to propose the alienation of the specified real estate to facilitate the unobstructed alienation of the property located at 38/1 Pushkin Street, Yerevan, by G.K. and his son A.K. Based on A.A.'s instructions, G.G. and A.A. sent a letter to Minister A.A. on September 10, 2014, requesting to alienate the specified property of the university to stabilise its financial situation rapidly. As a result, G.K. and A.K.'s associate G.T. acquired the property at 215 million 228 thousand drams, which was registered in A.K.’s name based on a formal sales agreement for 75 million drams in 2017.

4. G.K. is accused of laundering particularly large amounts of money amounting to 151 million 126 thousand drams in agreement with V.S., the executive director of 'Grinding Machine' LLC, and his relative R.G. Specifically, based on a real estate purchase agreement signed on July 15, 2009, the real estate complex located at 1/2 G. Nzhdeh Street, Gyumri, was acquired in the name of R.G., which included a 6.4199 ha land plot, a main building with an area of 13,678.20 sq.m, a welding workshop with an area of 866.26 sq.m, two storage rooms with an area of 534.96 sq.m each, administrative premises of 18 sq.m and 72 sq.m, as well as various size enclosing walls. The total cadastral value of the property amounted to 122 million 876 thousand drams. The property, whose ownership rights were registered in the names of R.G. and his wife Z.G., has subsequently been used multiple times as collateral for obligations of associated third parties. That is, on December 12, 2013, the property was collateralized in 'HSBC Bank Armenia' CJSC for the purpose of securing a 10 million US dollar loan obligation granted to H.E., the director of 'YUKOM' LLC, and A.E., the director of 'AYYUNETFORCS' LLC. On November 10, 2016, the same property was collateralized in 'Ardshinbank' CJSC to secure a 4.8 billion drams obligation granted to A.E. On December 12, 2016, the property was again collateralized in 'Ardshinbank' CJSC for the purpose of securing a 28 million US dollar obligation granted to H.E., the director of 'YUKOM' LLC. On October 27, 2023, the same property was collateralized in 'Ardshinbank' CJSC for the purpose of securing a 30 billion drams obligation granted to 'YUKOM' LLC.

As a result of the actions described above, particularly large assets obtained through criminal means and the income derived from its movement and circulation have been introduced into legal circulation, given a legal appearance, and concealed their true nature, source, and movement. Thus, public criminal prosecution has been initiated against G.K. under points 1, 2 of part 3 of Article 179, part 1 of Article 314, part 2 of Article 38-308, part 1 and parts 1 and 3 of Article 190, as well as under part 2 of Article 311 of the RA Criminal Code of April 18, 2003.

On August 24, 2026, the results of the forensic medical examinations assigned on June 19 and June 22, 2025, concerning G.K. were received. According to the findings of the forensic medical examinations, G.K. did not require surgical intervention; the necessity for it might be considered after he undergoes an MRI (G.K. refused the MRI). If there is a corresponding indication, surgery can be performed in specialized divisions of medical institutions in the Republic of Armenia. Moreover, the forensic medical examination concluded that G.K. does not have health issues that might impede his participation in any procedural actions of the criminal proceedings.

It should be recalled that since 2020, cooperation had begun between the competent authorities of the Republic of Armenia and the United States of America with the purpose of freezing and subsequently returning the funds obtained from the sale of the house owned by G.K. and his family in the USA. As a result of this cooperation, in May 2022, the American side initiated the process of confiscating the house by filing a civil lawsuit. On June 14, 2024, G.K. and A.K. submitted a request to the US district court to conclude a settlement. Consequently, a settlement agreement was reached between the US Justice Department and G.K. and A.K., which was confirmed by the court's decision on June 25, 2024, and published on July 5.

Based on the settlement agreement, on January 7, 2025, the house was sold at auction for 36 million US dollars, in which 85 percent was transferred to the US government, and 15 percent to the aforementioned family. The text of the settlement agreement stipulates the intention of the US Justice Department to propose that the US government return the remaining amount to the Republic of Armenia after deducting their expenses from the 85 percent amount.

It should also be noted that the case of G.K. regarding the abuse of official powers, particularly large-scale embezzlements, aiding in money laundering, and receiving particularly large bribes is being examined at the Anti-Corruption Court, while the case concerning his son A.K. and nephew A.K., as well as S.A., the general director of 'Multi Group Concern’, and A.P., an employee of one of the banks, is being examined at the same court under a different judge. Public criminal prosecutions have been initiated against these individuals for assisting in the abuse of official powers, facilitating the embezzlement of particularly large property using their official positions, assisting in receiving particularly large bribes, as well as money laundering. In this case, the prosecutor's motions have been granted as of July 2, 2026, and measures of restraint have been applied against A.K. and A.K., with the 200 million dram bail imposed on them becoming state revenue.

In addition to the criminal proceedings, in the context of the lawsuits regarding the confiscation of illegally obtained property being examined at the Anti-Corruption Court, the former Minister of Finance G.K. and related persons, including his sons, are demanded to recover 193 real estate properties, including 46 apartments in the Center administrative district, 89 real estate properties in Kotayk province, and 29 participations in legal entities, including 'MEGASPORT' LLC, and 'MEGA FOOD' LLC, 14 movable properties, bonds acquired amounting to about 1 billion 451 million US dollars, approximately 147 thousand US dollars in deposits, as well as claims of 23 million 81 thousand US dollars, 409 million 806 thousand drams, and 9750 euros, amounting to 17 billion 761.5 million drams.