Security Dream Defrauded the Armenian Government Out of Billions

Security Dream has defrauded the Armenian government out of billions, according to Armtimes.com.

"Security Dream LLC, at the time of submitting its application to participate in the open procurement process announced by the Road Police of Armenia for the acquisition of traffic control systems for state needs (Procurement Code: RA Police-APSD-11/02) in 2011, had only one employee (the director). However, to meet the qualification criteria of the competition, it needed to have the appropriate scope and experience in similar work, specialized staff, and financial resources consistent with its proposal. Security Dream was declared the winner in blatant violation of the requirements of the RA law on 'Procurement' and the terms of the competition, as it did not meet the qualification criteria presented to the competition participants (it had blatant discrepancies). Security Dream did not provide any documents to the competition commission of the RA police confirming its compliance with the qualification criteria.

Security Dream proposed a budget of €9,849,562 for the acquisition of property for state needs and for the operating costs of the monitoring system (including the control system for traffic light signals) from 2011 to 2017. Security Dream LLC received €500,000 (equivalent) in funds from Inecobank in 2011. Apart from this amount, it did not invest any other funds. Later, the funds received for the assets sold to the RA Road Police were used to purchase speed cameras, video cameras, and other supplementary components. In other words, Security Dream, using state funds (the €500,000), undertook the entire purchase of the monitoring system, yet under the terms of the competition, it was supposed to purchase the system at its own expense and recover its investment after the operation of the system.

Security Dream did not invest any amount exceeding €500,000 from its own funds. This means that it made the purchase for the state, at the state’s expense, and with state funds, even though the winning condition of the competition was for the participant to make that acquisition with its own resources.

One of the conditions proposed in the procurement competition was the implementation of a control system for traffic light signals, valued at €2,227,950, which Security Dream did not execute (this exceeds 20% of the contractual value). The expenditure exceeding two million euros was replaced by an agreement between Security Dream and the Road Police to install additional cameras, as Security Dream was spending only 700,000 to 800,000 AMD to furnish one intersection while selling it for 3 million AMD. According to the legal regulations of the RA law on 'Procurement,' if the need for the acquisition of an item ceases at the client’s end, the procurement contract is subject to termination. However, since this involved Security Dream, which is considered close to the circle of the RA President, it was allowed to acquire much more profitable cameras instead of the 'unwanted and unprofitable' control system for traffic lights—exceeding €2 million—thus violating the limits of the authority to amend the contract.

Under the contract signed on June 13, 2011, between Security Dream and the Road Police of the RA for the 'Acquisition (Purchase) and Maintenance of Traffic Control Systems for State Needs (Procurement Code: RA Police-APSD-11/02),' the object of the purchase was entirely delivered to the client—the Road Police of the RA—and the contractual relationship regarding the purchase of goods ceased as of February 15, 2017; only the service provision relations remained. In order to terminate (end) these, the RA government in 2017, likely unaware that more than 18 billion AMD had been paid to Security Dream between 2012 and 2017 for services, paid an additional 2.5 billion AMD in compensation for 'damages' incurred by Security Dream due to the termination of the contract. Security Dream, having not invested any amount exceeding €500,000, while paying its participants (Gurgen and Alexander Zakaryans) dividends reaching several billion, managed to 'convince' that it operates at a loss and, through deception, managed to extort an additional 2.5 billion AMD from the RA government as compensation for its alleged losses.

To be continued…" Armtimes.com reported.