Then Finance Minister Gagik Khachatryan attending a meeting in the parliament, Yerevan, November 2, 2015

Former Armenian Tax Chief Arrested In Corruption Probe

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YEREVAN – Gagik Khachatryan, a controversial former finance minister, was arrested on Tuesday, August 27 as part of a corruption investigation conducted by Armenia’s National Security Service (NSS).

Another law-enforcement agency charged Khachatryan, who had also run the national tax and customs services under former President Serzh Sargsyan, with wasting large amounts of public funds while in office.

The Special Investigative Service (SIS) gave very few details of the case, which is understood to be separate from the NSS investigation. A spokeswoman said that SIS investigators have already recovered 800 million drams ($1.7 million) in “damage inflicted on the state” by Khachatryan.

The SIS indictment was announced hours after NSS officers raided Khachatryan’s and his relatives’ expensive properties in and outside Yerevan. The NSS director, Artur Vanetsyan, personally reported the searches.

“Searches are being conducted at Gagik Khachatryan’s apartment, mansion and other properties as well as the properties of individuals connected to Gagik Khachatryan,” Vanetsyan told reporters. “The searches are still going on and after they are finished Mr. Khachatryan will be taken to the National Security Service for questioning.”

Vanetsyan said Khachatryan is suspected of abusing his powers and misusing “tens of millions of dollars” worth of taxpayers’ money. He did not elaborate.

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The NSS announced the once powerful official’s arrest in a statement issued later in the day. It did not formally charge him yet.

Also arrested was Khachatryan’s nephew Karen, who used to run an internal security division of the State Revenue Committee (SRC) comprising Armenia’s tax and customs services.

The statement also said that the NSS launched its corruption probe in February this year and has taken “large-scale” investigative actions since then. According to Vanetsyan, Khachatryan was repeatedly questioned as a “witness” in the case prior to the searches.

Khachatryan, 53, had held various positions in the tax and customs services for over a decade preceding his appointment as SRC chief in 2008. He headed the tax collection agency until 2014 and served as Armenia’s finance minister for the next two years.

Throughout his tenure Khachatryan was dogged by corruption allegations, with some Armenian media outlets and opposition figures accusing him of using his position to become one of the country’s richest men. They cited his family’s extensive business interests, which include one of Armenia’s three mobile phone networks as well as a shopping mall, a car dealership and a luxury watch store in Yerevan.

Khachatryan repeatedly denied ownership of these and other businesses, saying that they belong to his two sons and other relatives.

Vanetsyan clarified on Tuesday that Khachatryan’s sons are not under investigation.

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