The accusations stem from the privatization in 2012 of a 300-square-meter plot of land in downtown Yerevan by a company allegedly controlled by Armen Smbatian, a former Armenian ambassador to Israel and Russia, and Sergei Smbatian, the artistic director and chief conductor of the Armenian State Symphony Orchestra.
According to the Office of the Prosecutor-General, the company bought the land for 170 million drams (now equivalent to $435,000) in return for a pledge to build a cultural center there as well as a new concert hall and central heating system for an adjacent music school. It constructed a 17-story office building instead, causing the state almost 1 billion drams ($2.6 million) in “damage,” the law-enforcement agency claimed in a statement.
A court in Yerevan promptly agreed to remand both men in pre-trial custody. Their lawyer, Yervand Varosian, dismissed the “absurd” charges on Monday, likening them to an “artistic work transcending all bounds of imagination.” Varosian also argued that the Armenian statute of limitations for the crime allegedly committed by the Smbatians has expired.
The prosecutors also implicated Hasmik Poghosian, a fugitive former culture minister, in the alleged fraud. They said that Poghosian, who served as minister from 2006-2016, gave the green light to the privatization deal despite being aware of the Smbatians’ real intentions.
Poghosian has been on the run since being charged in late 2020 with abusing her position to privatize a historic Yerevan building in a complex fraud scheme allegedly facilitated by Armen Smbatian. The latter posted bail and avoided arrest at the time.
A musician by education, Smbatian Sr. was the rector of Yerevan’s Komitas State Conservatory from 1995-2002. He served as ambassador to Russia in the following years.