Dozens of Armenian citizens acted as proxy directors for a network of companies used by Eastern European oligarchs to move millions of dollars, transfer assets from closed banks abroad, and pay for lobbying services in the United States, according to an investigation by Forensic News and Hetq.
Many of the companies are shareholders of each other and nearly all of them have similar websites that were created by two men. Some of them were directly involved in the Russian Laundromat scandal, which saw US$1 billion stolen.
Registered in Central Europe and Southeast Asia, the companies have been allegedly used in various money laundering schemes to cover up crimes and sponsor political campaigns. Money is moved using invoices for goods such as textiles, equipment, and agricultural items, although there was doubt if any physical exchange of goods ever took place.
Mushegh Jabakhjuryan, who was injured in the Artsakh 2020 war, founded Equimach Sp Zoo, a company registered in Poland in 2017, and serves as its board chairman. His company is one of many that have been created with the data of nearly 100 Armenian citizens, who are not fully aware of the purposes.
When reporters asked Jabakhjuryan about his company, he initially denied having ever traveled to Europe, let alone founding a company there. But when they pointed to the photographs he had posted on social media of himself visiting Europe, he became angry and refused to talk.
His neighbor, Gevorg Setyan, who accompanied him on his European trip, registered the Polish Agrofusion Sp z.o.o. company in his own name. Setyan, who drives a cab in Armenia’s capital, was also involved in the creation of the company, but from contacts with him, reporters concluded that he might have not “understood the bigger picture” of the story he was involved in.
Reporters who interviewed many directors said they don’t want to talk about their European trips or admit who invited them to Europe and for what purpose. Many of them only knew they were invited to Europe by friends, where they stayed in the best hotels and then returned home.
In the case of a company called Agrofusion, reporters found that it has sent and received millions of dollars from Russian, Ukrainian, and Moldovan companies and has accounts at the Polish banks ING Bank Slaski and Bank Ochrony Środowiska S.A.
Agrofusion also acted on behalf of Mountain Group Limited, which has Aleksander Mamut, a Russian oligarch who has been sanctioned by the President of Ukraine, as an ultimate beneficiary.
According to the investigation, Baltic banks are becoming more vigilant towards companies that have accounts in their banks due to previous scandals. Consequently, criminals have shifted their illegal activities to other countries, with the Czech Republic being one of them.
The laxness of Czech law enforcement agencies about company registration requirements is creating gaps, senior analyst at Transparency International in the Czech Republic Marek Chromy told reporters.
But as for Armenia, there are those who are now set on cracking down on such proxy schemes.
“If there is money laundering, wherever it takes place, they [Armenian authorities] will come after those people,” said Ara Ghazaryan, an attorney and specialist in international law.
And while the country will not extradite its own citizens should they commit such crimes abroad, Ghazaryan notes that this kind of protection ultimately will not save them.
“Armenia will be obliged to prosecute them here,” she said.