Accusation of embezzlement in a settlement relating to the Armenian genocide

It is claimed that two lawyers have illegally used the compensation gained in a class-action lawsuit over survivor benefits from the Armenian genocide. State Bar of California launched an investigation.

Two American-Armenian lawyers are accused of embezzlement in a settlement with insurance companies relating to the Armenian genocide. According to 13-page indictment, two Glendale lawyers Vartkes Yeghiayan and Rita Mahdessian, who are married, are accused of embezzling hundreds of thousands of dollars from a 20-million-dollar settlement relating to the Armenian genocide, misrepresenting two nonprofit groups they created to appropriate the funds. The licenses of two lawyers might be canceled and a criminal prosecution might be filed against them. 

In the disciplinary proceeding conducted by State Bar of California, two lawyers are charged with embezzlement, misappropriation and moral turpitude. According to the indictment, two lawyers had siphoned more than 300,000 dollars of settlement money stemming from a class-action lawsuit over survivor benefits from the Armenian genocide. It claimed that the couple misrepresented two nonprofit groups they created to appropriate the funds. Lawyers deny the accusations. 

Who had the “Unclaimed Benefits Fund”?

In 2005, a class-action lawsuit was launched against French insurance company AXA over survivor benefits from descendants of Armenian genocide victims. Yeghiayan and Mahdessian were co-counsels on the case. The settlement was 20 million dollars and the insurance company was required to pay 17.5 million dollars. From that settlement, 3 million dollars were determined as “unclaimed benefits fund” and according to the indictment by the state bar, nine specific beneficiaries are named, including Armenian Apostolic Church Western Diocese. As part of the settlement, the money left after paying the main settlement and administrative costs could be distributed to charitable organizations recommended by Yeghiayan and Mahdessian.

According to the indictment, one of the nonprofits, the Center for Armenian Remembrance (CAR), was created 3 months after the settlement. The second nonprofit, the Conservatoire de la Memoire Armenienne, was claimed to be working under two lawyers' firm Brand Boulevard. The shell companies' registered addresses are the same with that of the firm. According to the state bar, lawyers requested the remaining money to be given to these organizations that they qualified as charitable. However, Yeghiayan and Mahdessian failed to produce any record of charitable activity or disclose their ties to the companies. It is claimed that around 250.000 dollars in CAR's account were transferred to Yeghiayan's company and the rest was used for covering college expenses of their two children.

Vartkes Yeghiayan was born in Ethiopian capital Addis Ababa in 1936 to a family from Isparta, Turkey. Living in the US since 1954, Yeghiayan is the counsel of many cases related to the Armenian Genocide. 

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Fatih Gökhan Diler