Acquisition of Khachatryan Family's Luxurious Mansion Becomes Risky Due to American Prosecutors' Action

Due to the measures taken by American prosecutors, the luxurious mansion owned by the sons of former head of the State Revenue Committee and ex-Minister of Finance Gagik Khachatryan, which was put up for sale, has somewhat lost its appeal to potential buyers, reports hetq.am.

Recall that in 2011, Khachatryan's elder son, Gurgen, and the 'Veto Trust' he managed purchased one of the mansions in the luxurious Holmby Hills neighborhood in Westwood, Los Angeles for $14.4 million (address: 530 South Mapleton Drive). In 2017, the Khachatryan family constructed a new home at this address, which has a living area of 3,126 square meters and a total property area of 5,224 square meters.

The two-story new villa features 11 bedrooms, 27 bathrooms, a dining room, a family room, staff quarters, a home theater, a library, a media/music room, a lounge, an office, a wine cellar, a basement, a garage, a laundry room, and a swimming pool in the yard.

In 2016, 'Veto Trust' and one of its managers, Ted Tadevos Khachatryan, transferred ownership of the mansion to 'WRH', a company he manages and which is registered in Los Angeles. Ted Khachatryan serves as the executive and financial officer, while the directors are Artyom and Gurgen Khachatryan. Although on paper 'WRH' is the owner, the real owners are Gagik Khachatryan's sons.

In May, the U.S. Department of Justice announced that it had filed a lawsuit in the Central District Court of California to seize the real estate at 530 South Mapleton Drive. The American side believes that the Khachatryan sons acquired the house through unlawfully obtained funds. Specifically, this refers to $22,401,000 given to the Khachatryans by Sedrak Arustamyan, the CEO of businessman Gagik Tsarukyan's 'Multi Group' consortium in 2011, which Armenian and American law enforcement consider a bribe (to gain favorable treatment from the State Revenue Committee led by Gagik Khachatryan at the time), while Arustamyan and the Khachatryans describe it as merely a loan.

On April 7 of this year, before U.S. law enforcement publicly announced the seizure lawsuit, the Khachatryans, more specifically the 'WRH' company, put the mansion on the market for $63.5 million.

However, on May 4, just two days after filing the lawsuit, U.S. prosecutors registered a notice in the official records office of Los Angeles County regarding the property up for sale, stating that there is a legal case concerning it. This notice is known as 'lis pendens' in American law (translated from Latin as 'suit is pending'). While this does not constitute a ban on the alienation of the property or other transactions, it is somewhat close to that.

The essence is that if the property subject to 'lis pendens' has its ownership rights contested in court, then even if the current owner manages to sell the property, the buyer will be obligated to comply with the court's ruling, including relinquishing the property in favor of the plaintiff if the lawsuit is won.

It is clear that if any party, in this case the U.S. authorities, is contesting the ownership rights of 'WRH' (effectively the Khachatryans) over the luxurious mansion in court, then potential buyers of the property will generally be reluctant to take the risk of acquiring the mansion since it remains uncertain what the court's ruling will be. If the court grants the prosecutors' claim (the seizure claim is being examined not as a criminal case but within the framework of civil litigation, though the interests of the state are represented by prosecutors), the property will pass to the state. This means that even if the Khachatryans manage to alienate the mansion, following such a court ruling, the buyer would be compelled to return it to the state and seek a refund from the Khachatryans.