LAX Leader

The Justice Department has announced a settlement in a civil forfeiture case involving a mansion in Holmby Hills, Los Angeles, owned by the family of Gagik Khachatryan, a former government official in Armenia.

In 2011, a trust benefiting Khachatryan’s sons purchased the property with funds from an Armenian businessman. At that time, Khachatryan was the senior official overseeing taxes and customs in Armenia. The sons claimed the funds were loans from the businessman, but the United States alleged these loans were covers for bribe payments. These payments are also under criminal prosecution in Armenia.

According to the settlement terms, the mansion will be forfeited to the United States and sold at market price. The U.S. will retain 85% of the net proceeds from the sale, while Khachatryan’s sons and their corporation will receive the remaining proceeds. The Attorney General has discretionary authority to transfer forfeited property to any foreign country involved in its seizure or forfeiture. It is intended that some or all of these proceeds may be transferred to Armenia.

“We do not tolerate corruption in the United States and we will not allow foreign officials to use our country to facilitate their own corruption,” said United States Attorney Martin Estrada. “Our recovery of these ill-gotten gains should send a message to corrupt officials throughout the world that they will find no safe harbor here.”

The FBI’s Eurasian Organized Crime Task Force (EOCTF) and U.S. Marshals Service investigated this case. EOCTF includes agencies such as FBI, IRS-Criminal Investigation, U.S. Postal Inspection Service, Glendale Police Department, Los Angeles Police Department, and Los Angeles County Sheriff's Department. Critical assistance was also provided by various offices including Justice Department’s Office of International Affairs and Armenian authorities.

Assistant United States Attorney Maxwell Coll and Trial Attorney Hunter Smith prosecuted this case.

The Kleptocracy Asset Recovery Initiative aims to forfeit proceeds of foreign official corruption through MLARS prosecutors working with federal law enforcement agencies and U.S. Attorney’s Offices. Individuals with information about possible proceeds of foreign corruption located or laundered through the United States are encouraged to contact federal law enforcement or submit tips online.