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Armenian Prosecutors To Probe ‘Pension Scam’


Armenia -- The main entrance to the Office of the Prosecutor-General, 15Dec2009

Armenia -- The main entrance to the Office of the Prosecutor-General, 15Dec2009

Armenia’s Office of the Prosecutor-General launched on Tuesday criminal proceedings into what an Armenian parliamentary body has described as widespread fraud in the payment of state pensions.


It said unnamed officials from the country’s state pension fund are likely to be prosecuted on charges of fraud, embezzlement of public funds and abuse of power.

The move came just days after the Armenian parliament’s Audit Chamber officially publicized what it claimed is evidence of large-scale corruption within the fund.

Presenting its annual report to the National Assembly last Thursday, the head of the chamber, Ishkhan Zakarian, said thousands of Armenian pensioners have received, on paper, pensions years after their death. He implied that this money has been pocketed by officials from the State Social Security Service.

The allegations stem from the ongoing inspection of the service which was launched by the Audit Chamber a year ago. Its first preliminary results were reportedly presented to President Serzh Sarkisian last fall. The chief of the service, Vazgen Khachikian, was dismissed from his post shortly afterwards.

These findings were also sent to the Armenian Finance Ministry, which in turn forwarded them to the Office of the Prosecutor-General last week. The law-enforcement agency found the fraud claims credible with a written statement announcing the opening of a formal criminal case.

The statement said State Social Security Service officials rigged documents and committed other fraud “for personal gain” and “in group interests.” It did not name any of those officials.

A spokesman for the prosecutors, Shahen Tonoyan, also refused to give any names, arguing that nobody has been questioned or charged yet. “When criminal accusations are brought, the public will receive relevant information,” he told RFE/RL’s Armenian service.

It thus remained unclear whether Khachikian, who is a senior member of the ruling Republican Party of Armenia (HHK), also risks prosecution. The former pension fund chief has not been available for comment over the past week.

His wife, Lilit Asatrian, told RFE/RL’s Armenian service on Tuesday that the 39-year-old has left the country to undergo a medical examination in a foreign clinic. She refused to elaborate.

Khachikian denied any wrongdoing in a recent interview with RFE/RL. He insisted that the violations reported by the Audit Chamber were not systematic and that he was not aware of them.

The chamber claims that those violations have cost the state millions of dollars. Zakarian told the parliament that as many as 20,600 “dead souls” were removed from the national list of pensioners last December. As a result, he said, some 3.3 billion drams ($8.8 million) in public funds were saved in the first quarter of this year.

However, the prosecutors estimated the total amount of embezzled funds at only 113 million drams. Commenting on this discrepancy, Tonoyan, said: “The [embezzled] sum has been calculated on the basis of materials examined until now and it could change later in the investigation. The investigation is continuing.”

“The Audit Chamber has not yet sent us materials,” added the spokesman. “The criminal case has been opened on the basis of information sent by the Ministry of Finance.”
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