Property Sold to the State at Three Times Its Value with Fake Documents

The Prosecutor General's Office has examined the documents pertaining to the alienation of a 1719.96 square meter public utility area located at 1/2 Tsitsernakaberd Highway, Malatia-Sebastia administrative district of Yerevan, and an adjacent 0.1030 hectare undeveloped land plot, received from the Ministry of Labor and Social Issues.

In order to ensure the completeness of the study, relevant information and documents were also requested and received from the State Property Management Committee, Cadastre Committee, and the National Archive of Armenia. This was reported by the public relations department of the Prosecutor General's Office.

The study revealed that a renunciation agreement was signed between the State Property Management Department and “D...” LLC based on a government decision on November 9, 2017, aimed at creating a regional center for integrated social services in the Central administrative district of Yerevan. According to this, the aforementioned public utility area, and the adjacent undeveloped land plot, which was partially granted in September 2015 as a budgetary loan obligation, was alienated to the company at a market value of 1,240,423,000 AMD as of November 2017, which was attached to the State Administration of the Ministry of Labor and Social Issues.

It was found that the basis for the adoption of this government decision and the set price for the property was a market value appraisal report drawn up by an appraiser from the State Property Inventory and Valuation Agency, approved by the director general. Notably, this report was submitted just one day before the government decision was adopted. Moreover, according to data received from the Ministry of Labor and Social Issues, during the April 25-26, 2019 World Bank mission implementing support for the program, the WB team deemed the said area unsuitable for creating a regional center for integrated social services.

By the order of the Ministry, a market value assessment of the said property was conducted in 2019, according to the report of which, the market value of the area and the adjacent undeveloped land plot is only 321,700,000 AMD, which is 918,723,000 AMD less than the price at which it was alienated to the state.

Furthermore, data received from the Cadastre Committee indicated that during 2017 from January to December, the first floor or basement areas of the building were sold at prices ranging from 162,000 to a maximum of 217,000 AMD per square meter. Meanwhile, the aforementioned public utility area, which is recorded in the cadastre as basement-level, was sold to the state for about 600,000 AMD per square meter for its needs in November 2017. These facts indicate that the data provided in the market value appraisal report by the State Property Inventory and Valuation Agency do not correspond to reality.

According to data received from the National Archive of Armenia, the draft of the government decision dated November 9, 2017, under which the alienation occurred, was submitted to the government by the State Property Management Department. Thus, in 2017, a responsible official of the State Property Inventory and Valuation Agency, misusing their official position against the interests of service, approved a fictitious document, a market value appraisal report that does not correspond to reality.

Based on this, responsible officials from the State Property Management Department presented unreliable data to the government for discussion, abusing their official position. As a result, real estate with a market value of approximately 321,700,000 AMD was sold to the state supposedly for state needs for 1,240,423,000 AMD, meaning at a price nearly three times higher than the market price, causing severe consequences for the state.

Considering that the investigation has revealed factual circumstances indicating a manifest crime, the Prosecutor General's Office has initiated a criminal case under the second part of Article 308 and the first part of Article 314 of the Criminal Code of the Republic of Armenia. The inquiry has been entrusted to the Investigative Committee of the Republic of Armenia.