Cases of Damaging the State with Tens of Billions of Drams Uncovered Due to Illegal Entrepreneurial Activities - NSS

The National Security Service of Armenia has reported that a complex of effective operational-investigative measures, alongside extensive investigative and procedural actions conducted by its investigative department, has uncovered numerous instances of substantial damage being inflicted on the state as a result of illegal entrepreneurial activities conducted without special permits or licenses.

In particular, the investigations revealed that individuals authorized to operate the company “Onira Club” LLC, registered in the state register of legal entities of the Ministry of Justice of Armenia on December 29, 2010, were aware of the provisions contained in Article 6, Part 3, Subparagraphs 'a', 'b', and 'c' of the law on gambling and casinos passed on December 28, 2013, which restricts the organization of casinos and/or gambling activities through gaming machines and/or internet gambling exclusively from educational and cultural sites, administrative buildings of state and local self-government bodies, and hospitals located at specified distances set by the Armenian government in areas such as Tsaghkadzor in Kotayk region, Jermuk in Vayots Dzor region, Sevan in Gegharkunik region, Meghri community in Syunik region, as well as the territory of Yerevan’s Zvartnots International Airport.

Moreover, under an investment program approved by the Armenian government with funding exceeding 40 billion drams, operational activities could theoretically continue only in designated locations that met government criteria. However, with the intention to monopolize the gambling sector and to deceitfully cause particularly large-scale property damage to the Armenian government, the representatives of “Onira Club” LLC concealed the true facts regarding the previously constructed entertainment venues and the existing “Shangri La” casino, misleading the relevant authorities and leading them to approve their program. They falsely represented that these structures had been constructed with an investment of 61.146 billion drams, creating 500 jobs, thus enabling the continuation of their operations.

As a result, the state lost the opportunity for a significant investment of 40 billion drams.

Subsequently, on December 27, 2013, the authorized persons of “Onira Club” LLC obtained a license for gambling operations at a leisure and entertainment center located at address 5, Yerevan-Abovyan Highway in the village of Verin Ptghni, Kotayk region. They then ignored legal provisions indicating that gambling activities must be conducted solely at the location specified in the license, thereby breaching multiple laws and regulations regarding state duties, taxes, and unauthorized gambling activities.

From 2014 to 2020, they continued operating gambling activities without the required special permissions, resulting in damages amounting to 29.75 billion drams to the state. A criminal case has been initiated by the NSS Investigation Department under Article 188, Part 3, Item 1, and Article 184, Part 2, Item 1 of the Armenian Criminal Code, with urgent investigative and procedural actions currently underway to clarify the framework of the individuals involved in the criminal scheme, categorize their actions legally, and ensure restitution for the damage caused to the state.

Note: A suspect or accused is considered innocent until proven guilty through legal proceedings as per the provisions of the Armenian Criminal Procedure Code by a court's final judgment.