Investigation Concludes on Major Fraud Case of the North-South Road Corridor

The Special Investigative Service of Armenia, in collaboration with various state bodies, has concluded the investigation regarding fraud cases associated with the implementation of the North-South Road Corridor project. This was reported by the Investigative Committee of Armenia.

According to the findings from the investigation, Sedrak Arustamyan, the director of Multi Group Concern, while effectively managing the activities of Stons LLC, and together with his associates Suren Avagyan and Gurgen Sargsyan, has been implicated in fraudulent activities during the implementation of the subproject 'Reconstruction and Improvement of the Talin-Gyumri Road' from June 10 to August 8, 2016.

The representatives of the Armenian branch of Sinohydro Corporation, the contracting company responsible for the construction works on the segments of Talin-Lanjik and Lanjik-Gyumri, were reportedly involved in facilitating financial misappropriation by agreeing to issue invoices for services not rendered, thus aiding in large-scale tax evasion.

Through various agreements that were purportedly established for consultancy services between Stons LLC and Sinohydro, a total of approximately 1.139 billion AMD equivalent to 681,705 Euros and 1,652,277 USD was transferred as advance payments for services that were never provided.

To cover these illegal financial dealings, the principal accountant of Stons LLC executed a series of fraudulent transactions, including the creation of fictitious documents and fake invoices to legitimize illicit funds and conceal the true nature of the finances involved.

Further investigations revealed that the deceitful practices also extended to the payment of bribes to tax inspectors to avoid penalties and audits, underscoring a broader scheme involving multiple actors within the company.

As a result of these findings, several individuals have been charged under various articles of the Armenian Criminal Code, and as a precautionary measure, bail has been imposed. Significant compensation has also been transferred to the state's deposit account in relation to the damages caused by these criminal activities.

The investigation has officially concluded, and a request has been submitted to the Prosecutor's Office to forward the case to court for prosecution.