Ex-Officials Sentenced In Pension Scam Trial

A court in Yerevan sentenced two former executives of Armenia’s state pension fund to seven and three years in prison on Monday in the first trial stemming from large-scale fraud in the payment of social benefits alleged by law-enforcement authorities.

Sargis Hakobian, the former head of the fund’s branch in Yerevan’s Davitashen district, was convicted of fraud, embezzlement and abuse of power and received the harsher punishment. The other defendant, Greta Vartanian, is one of his former subordinates.

Hakobian and Vartanian went on trial earlier this year along with eight other individuals. The latter got off with hefty fines. Five of them are retired civilian pilots who were charged with forging documents and paying bribes to receive higher pensions.

Hakobian and Vartanian were not kept under arrest before and during the trial, meaning that they will go to prison in the coming weeks or months if the jail sentences are not struck down by higher courts. Their lawyer, Razmik Tovmasian, would not say if they will appeal the verdict.

The trial was the result of an alleged fraud scam that was first exposed by the Armenian parliament’s Audit Chamber after a financial inspection of the State Social Security Service (SSS). The chamber claimed in late 2010 that thousands of elderly Armenians received, on paper, pensions years after their death, suggesting that that this money was pocketed by officials from the SSS. It also alleged other corrupt practices within the service.

The Office of the Prosecutor-General found these claims credible, assigning the Armenian police to open a criminal case. One pension fund official was arrested and more than 20 years named suspects in an ensuing police inquiry.

The fraud allegations also led to the sacking in December 2010 of Vazgen Khachikian, the SSS head and a well-known member of the ruling Republican Party of Armenia (HHK).

According to Hovannes Yenokian, a prosecutor dealing with the case, Khachikian is currently under investigation even though no criminal charges have been leveled against him yet. “Khachikian is also involved in this criminal case,” Yenokian told RFE/RL’s Armenian service (Azatutyun.am). “It’s just that the case is very extensive and complex. The investigation is still continuing.”

The Ministry of Labor and Social Security announced in January that it has revised Armenia’s national registry of pensioners and removed more than 10,000 names from it in response to the scandal.