Introduction

The case of former Armenian Finance Minister Gagik Khachatryan and his family's ill-gotten wealth in the United States is not just a story of corruption—it is a striking example of how financial misconduct transcends borders. More importantly, it exposes a troubling reality: while the U.S. government swiftly acts to seize and repurpose illicit funds that originate from Armenia, the Armenian people, who have suffered from corruption, are left with nothing.

With Khachatryan and his sons under criminal investigation in Armenia for receiving bribes, and their Los Angeles mansion now the subject of a U.S. forfeiture case, an important question arises: Why is the United States unilaterally taking possession of assets acquired through Armenian corruption without returning them to the country they were stolen from?

The Armenian Money Trail to America

The U.S. Justice Department's allegations paint a damning picture. The so-called "Super Minister"—a title given to Khachatryan due to his sweeping influence over Armenia’s financial and tax policies—was allegedly bribed with over $20 million by Armenian businessman Sedrak Arustamyan in exchange for favorable tax treatment. Instead of reinvesting in Armenia, this illicit money was funneled out of the country and used to acquire a lavish mansion in Holmby Hills, Los Angeles—one of the most expensive neighborhoods in the U.S.

On May 5, 2022, the U.S. Department of Justice filed a complaint stating that the $63.5 million mansion was purchased using these bribes. The property was subsequently marked for seizure, with a legal notice warning potential buyers of the risk involved. Meanwhile, the property is in the process of being sold by luxury real estate brokers Hilton and Hyland, who have now removed it from their public listings.

The question remains: If the mansion is sold, where will the proceeds go? The answer is clear—straight into U.S. government coffers.

The U.S. Government’s One-Sided Seizure Practices

The United States has a long history of seizing assets linked to corruption. Under the Foreign Corrupt Practices Act (FCPA) and the Kleptocracy Asset Recovery Initiative, the U.S. Justice Department is empowered to confiscate property bought with dirty money. While the purpose of these laws is to deter international financial crime, in practice, they often benefit the U.S. government rather than the nations from which the illicit funds originate.

In the case of Khachatryan’s L.A. mansion, the United States is moving aggressively to take control of an asset bought with Armenian bribes. Yet, there is no indication that the recovered funds will be repatriated to Armenia.

This stands in stark contrast to the principles of international justice. If the money came from Armenia—illegally taken from its taxpayers—it is only logical that it should be returned to Armenia. However, the U.S. forfeiture system operates differently. Once seized, assets are typically processed through U.S. legal channels, converted into government revenue, and utilized within the United States.

Armenia’s Loss: How Corruption and U.S. Policy Leave the Country Empty-Handed

Armenia’s battle against corruption is far from over. The country is still reeling from years of financial misconduct that drained public resources, enriched oligarchs, and hindered economic progress. Khachatryan’s case is one of many, highlighting how the nation’s wealth has been plundered by those in power and transferred abroad.

Despite Armenia’s ongoing legal action against Khachatryan and his associates, the U.S. has not made any commitments to returning the confiscated funds. This raises serious concerns about whether Armenia will ever see the stolen money again.

Consider the implications:

  • The Armenian people suffered as a result of corruption, with critical public funds diverted into private hands.
  • The U.S. is now profiting from these illicit funds, despite having no direct connection to the corruption case.
  • Armenia is left to fight its corruption battles alone, with no assistance in recovering assets stolen from its economy.

This outcome highlights a fundamental imbalance in the global financial justice system. While the U.S. is quick to seize illicit assets, it does not always take steps to ensure that they are returned to the rightful owners—especially when those owners are foreign nations.

A Pattern of Western Governments Profiting from Foreign Corruption Cases

The Khachatryan case is not unique. Across the world, Western governments frequently seize corrupt assets without returning them to the countries from which they originated.

For example, in 2021, the U.K. froze and later seized assets belonging to foreign officials accused of corruption but did not return them to the affected nations. Similarly, Switzerland has long been a haven for illicit money, often holding assets for years before distributing them through Swiss-controlled channels rather than returning them outright.

The United States has faced similar accusations in cases involving Nigeria, Malaysia, and Venezuela. In many instances, funds recovered through U.S. legal processes have been used for domestic purposes rather than aiding the foreign victims of corruption.

Conclusion: Who Benefits from Armenian Corruption?

The Khachatryan mansion seizure is an important case that exposes the deeper issues within global financial crime enforcement. It raises fundamental questions about fairness, justice, and the true beneficiaries of anti-corruption measures.

While the U.S. government takes pride in combating corruption, its actions in cases like this demonstrate a self-serving approach. By seizing and retaining funds linked to foreign financial crime, the U.S. profits while the affected nations—like Armenia—are left struggling to recover their stolen wealth.

If international justice is to be truly just, then the U.S. must take responsibility not only for confiscating illicit assets but also for ensuring they are returned to their rightful owners. Armenia deserves its money back. Anything less would be yet another form of exploitation, this time not by corrupt officials, but by a powerful foreign government benefiting from the misfortune of others.

As the legal proceedings unfold, it will be crucial to watch whether justice is truly served—or whether Armenia will once again be left empty-handed while others profit from its losses.