The Chief Accountant of "Stons" LLC Arrested

The investigation of the criminal case initiated in connection with the abuses committed during the implementation of the "North-South Road Corridor" investment program continues at the Main Investigative Department of Particularly Important Cases of the RA Investigative Committee.

The IC has previously reported that, on September 20, 2019, the director of the "Multi Group" concern Sedrak Arustamyan, Gurgen Sargsyan, and Suren Avagyan were charged regarding the contractor Chinese "Sinohydro Corporation" and its subcontractor "Stons" LLC within the framework of the "North-South Road Corridor" program Tranche 3. On September 21, 2019, the court accepted the request for their arrest as a preventive measure, but at the same time allowed the application of an alternative measure of bail.

Charges were also brought against the chief accountant of "Stons" LLC as well as the directors of "EM ES Consulting" LLC and "Gevorgyan Consulting" LLC, which supposedly provided consulting services to the company. For them, a travel prohibition measure was chosen.

The further investigation of the criminal case has revealed that Sedrak Arustamyan, along with Gurgen Sargsyan and Suren Avagyan, effectively managed the activities of "Stons" LLC. They reached an agreement with representatives of "Sinohydro Corporation" LLC's Armenian branch to withdraw financial resources from the company through issuing tax invoices without providing services, thus facilitating tax evasion on a particularly large scale on behalf of the company.

To implement this, on June 8, 2016, in the framework of the mentioned program, they organized the signing of two contracts for the provision of consulting services between "Stons" LLC and "Sinohydro Corporation" LLC.

Under the pretense of fulfilling some of the obligations of these contracts, Arustamyan, Avagyan, and Sargsyan established "EM ES Consulting" and "Gevorgyan Consulting" LLCs on October 10 and November 11, 2016, respectively, through the chief accountant of their company without the aim of carrying out entrepreneurial activities. During this period, "Stons" LLC signed contracts with these companies allegedly for the acquisition of consulting services.

Between the signing of the contracts and April 4, 2017, a total of 1,162,260,574.5 AMD was transferred to "Stons" LLC under the pretext of acquiring services through seven transfers. The company’s chief accountant, acting on the instructions of the aforementioned leaders of "Stons" LLC, transferred 140,000,000 AMD to "EM ES Consulting" LLC and 124,800,000 AMD to "Gevorgyan Consulting" LLC as advance payments supposedly for the services provided by them.

The directors of "Gevorgyan Consulting" and "EM ES Consulting" LLC, acting on the instructions of the leaders of "Stons" LLC, did not perform works under the contracts, but rather effectively worked for "Stons" LLC and performed work as employees of the company. The accountant also recorded the amounts transferred to these consulting firms as miscellaneous expenses and made cash withdrawals as their wages, subsequently transferring large amounts back to Arustamyan.

Additionally, it was discovered that on March 2, 2020, the chief accountant facilitated an agreement to pay and receive a bribe regarding a tax audit of "Golden Flour" LLC. Following the detection of violations during the audit, charges were brought against the chief accountant, and a request for his arrest was made, which was met. However, bail was applied as an alternative measure.

On July 21, 2020, a decision was made to modify and supplement the charges against the chief accountant. A new charge was brought against him under several articles of the RA Criminal Code, and a request to replace his bail with arrest was granted by the court on July 24. The investigation continues.