VZCZCXRO5457
RR RUEHDBU RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHYE #0291/01 1241200
ZNR UUUUU ZZH
R 041200Z MAY 09
FM AMEMBASSY YEREVAN
TO RUEAWJA/DEPT OF JUSTICE WASHDC
INFO RUCNCIS/CIS COLLECTIVE
RUEHC/SECSTATE WASHDC 8993
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

UNCLAS SECTION 01 OF 02 YEREVAN 000291 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE JUDITH CAMPBELL 
DOJ FOR CARL ALEXANDRE AND CATHERINE NEWCOMBE 
AND DOJ/USDOJ 
AND BRUCE SCHWARTZ AND CRIM/AAG 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KDEM KJUS AM
SUBJECT: USG TRAINING HELPS GOAM COMBAT MONEY-LAUNDERING 
 
YEREVAN 00000291  001.2 OF 002 
 
 
 
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Summary 
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¶1. (SBU) Armenian prosecution of financial crime has taken a 
big step forward, as witnessed by successful conviction of 
four defendants in three money laundering cases in 2009.  The 
defendants received sentences of up to six years' 
incarceration, a high sentence by Armenian standards. 
Previous efforts to prosecute under Armenia's money 
laundering provisions were hampered by the belief that a 
money laundering prosecution could not be initiated without 
an affirmed conviction on the predicate offense that 
generated the illegally obtained money.  The Armenian 
Prosecutor General, however, has now agreed with the U.S. 
position, as supported by USDOJ/ OPDAT training, that money 
laundering prosecutions can proceed under local laws in the 
absence of a prior conviction on the money-generating 
offense.  USDOJ/ OPDAT has been training Armenian prosecutors 
on financial crime prosecutions since 2007; in April, 2009, 
INL and USDOJ/ OPDAT sponsored a US Treasury/ OTA weeklong 
training for thirty-one Armenian investigators and 
prosecutors on financial crime investigation.  END SUMMARY. 
 
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SUCCESSFUL MONEY LAUNDERING PROSECUTIONS, CONVICTIONS 
--------------------------------------------- -------- 
 
¶2. (SBU) Although the Armenian Criminal Procedure Code has 
prohibited money laundering since 2003, prosecutions have 
been rare because Armenian authorities interpreted the 
requirements restrictively, such that a money laundering 
prosecution could not even be initiated without the 
prosecution previously obtaining a conviction on the 
underlying crime that generated the illegally-obtained funds. 
 Moreover, even where such a conviction had been obtained 
after trial, authorities would feel compelled to wait until 
after the conviction had been affirmed on appeal.  As early 
as 2007, USDOJ/ OPDAT provided money laundering training for 
Armenian prosecutors, pushing for a more practical 
interpretation of the money laundering law.  That training 
was followed up in 2008 with one-on-one discussions and in 
2009 with a week-long conference on financial crime 
investigation. 
 
¶3. (U) In 2008, six money laundering investigations were 
initiated, including cases in which the prosecution sought to 
prove both the money laundering and the initial offense.  In 
2009, four additional money laundering cases were launched by 
Armenian authorities.  These prosecutions resulted from a key 
policy decision -- the Armenian Prosecutor General rejected 
the guidance of Armenian academics and adopted the more 
practical approach that had been urged by the USDOJ.  As a 
result, Armenia has now begun to prosecute money laundering 
cases without first obtaining a conviction on the underlying 
offense. 
 
¶4. (U) In 2009, Armenian law enforcement obtained three money 
laundering convictions on four defendants -- the first time 
such convictions were made in Armenia without obtaining a 
conviction on the underlying offence.  In one case the 
defendant was found guilty of commercial bribery and money 
laundering.  The defendant received a bribe of $10,000 US 
dollars from a high level company employee to sell company 
assets to the employee at a favorable price.  The defendant 
took the cash and directed that it be registered as a loan 
made to the company.  In the second case two defendants were 
convicted of money laundering and sentenced to six years and 
two years in prison.  The two defendants and others used 
fraudulent bank cards to steal from ATMs, with the Armenian 
money deposited into banks and changed into western currency. 
 In the third case the defendant was convicted of money 
laundering and grand larceny, after stealing over one million 
in U.S. dollars by using fraudulent bank cards.  The 
defendant transferred the money as a personal loan to his 
company's bank account.  The court imposed a sentence of 
seven years' incarceration, but suspended the sentence on the 
condition of full cooperation and repayment of the stolen 
funds. 
 
¶5. (U) The recent money laundering successes were announced 
by a Procuracy official at an INL-funded financial 
investigations training course, conducted in Yerevan, 
Armenia, April 13-17, 2009.  Two US Treasury/ Office of 
 
YEREVAN 00000291  002.2 OF 002 
 
 
Technical Assistance officials joined the OPDAT/ USDOJ 
Resident Legal Advisor for a week of training for 31 Armenian 
prosecutors, police investigators, and bank regulators.  In 
addition to the focus on money laundering, the conference 
topics included basic accounting, interview techniques, asset 
forfeiture, terrorist financing, obtaining financial 
information from international sources, and using indirect 
methods to prove a suspect's illicit income. 
 
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COMMENT 
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¶6. (SBU) The money laundering convictions represent a real 
step forward, but it remains to be seen whether the financial 
crime statutes will ever be used against the powerful 
oligarchs of Armenia who retain their wealth and untouchable 
status.  It is likely that the newly-used money laundering 
tools will stay shiny and clean in the prosecutor's toolbox, 
as they will be employed only against small-time criminals 
who have no connections within Armenia's government -- or 
potentially, and more problematically, against regime 
opponents. 
YOVANOVITCH