Justice Department Reaches Settlement in Holmby Hills Mansion Corruption Case

Justice Department Reaches Settlement in Holmby Hills Mansion Corruption Case

Holmby Hills property linked to former Armenian official sold

The Justice Department announced today that it has reached a settlement in a civil forfeiture case involving a mansion in the Holmby Hills area of ​​Los Angeles owned by the family of Gagik Khachatryan, a former Armenian government official.

In 2011, a trust for the benefit of Khachatryan’s sons purchased the property with funds provided by an Armenian businessman. At the time, Khachatryan was the top official overseeing taxes and customs in Armenia. While Khachatryan’s sons claimed the funds were loans from the businessman, the United States alleged that the loans, which were repeatedly extended without repayment, were actually bribes. These payments are also the subject of criminal prosecution in Armenia.

Under the terms of the agreement, the property will be forfeited to the United States, which will then sell it at the highest market price. The United States will keep 85 percent of the net proceeds from the sale, with the remaining 15 percent going to Khachatryan’s sons and a company they own. The attorney general has the authority to transfer the confiscated property to any foreign country involved in the seizure or confiscation. The offices involved in the case plan to recommend that some or all of the proceeds 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 U.S. Attorney Martin Estrada. “The recovery of these ill-gotten gains should send a message to corrupt officials around the world that they will not find safe haven here.”

The FBI’s Eurasian Organized Crime Task Force (EOCTF) and the U.S. Marshals Service investigated the case. The EOCTF includes agencies such as the FBI, IRS-Criminal Investigation, U.S. Postal Inspection Service, Glendale Police Department, Los Angeles Police Department, and Los Angeles County Sheriff’s Department. The Justice Department’s Bureau of International Affairs, the Prosecutor General’s Office of Armenia, and Armenian investigative authorities also provided critical assistance.

Assistant United States Attorney Maxwell Coll of the Cybersecurity and Intellectual Property Crimes Section and Trial Attorney Hunter Smith of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) prosecuted the case.

The Kleptocracy Asset Recovery Initiative, led by MLARS in partnership with federal law enforcement agencies and U.S. Attorneys’ Offices, seeks to confiscate the proceeds of foreign bribery. Individuals with information about potential proceeds of foreign bribery in the United States are encouraged to contact federal law enforcement or submit tips to [email protected] or https://tips.fbi.gov.