Identifier
Created
Classification
Origin
04YEREVAN1746
2004-08-05 13:46:00
CONFIDENTIAL
Embassy Yerevan
Cable title:  

LOS ANGELES BANK FRAUD COMES HOME TO ARMENIA

Tags:  PINS ASEC ECON EFIN AM 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L YEREVAN 001746 

SIPDIS

DEPT FOR EUR/CACEN, DS FOR CIL, IP/EUR

E.O. 12958: DECL: 08/05/2014
TAGS: PINS ASEC ECON EFIN AM
SUBJECT: LOS ANGELES BANK FRAUD COMES HOME TO ARMENIA

REF: ANDRES-OTTO 8/5/2004 TELCON AND FAX

Classified By: CDA Anthony F. Godfrey for reasons 1.5 (b) and (d).

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SUMMARY
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C O N F I D E N T I A L YEREVAN 001746

SIPDIS

DEPT FOR EUR/CACEN, DS FOR CIL, IP/EUR

E.O. 12958: DECL: 08/05/2014
TAGS: PINS ASEC ECON EFIN AM
SUBJECT: LOS ANGELES BANK FRAUD COMES HOME TO ARMENIA

REF: ANDRES-OTTO 8/5/2004 TELCON AND FAX

Classified By: CDA Anthony F. Godfrey for reasons 1.5 (b) and (d).

--------------
SUMMARY
--------------


1. (SBU) The U.S. Secret Service provided information on a
large transfer of fraudulently obtained funds from a U.S.
bank to bank accounts in Russia and Armenia. We sought GOAM
assistance in freezing the account in Armenia and recovering
the money already disbursed. Based on our intervention,
Armenia's Central Bank froze the suspect account. End
Summary.

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LOOTED TRUST FUND CASH ENDS UP IN YEREVAN
--------------


2. (SBU) Frankfurt's Secret Service liaison offices contacted
Post after noon August 5 with urgent information about a
fraudulent transfer of funds (USD 2.2 million) from a Bank of
America (BofA) account in Los Angeles to accounts in Russia
and Armenia, including roughly USD 1 million in Yerevan at
the British HSBC bank. The account holder, Ara Bostonjyan,
has already withdrawn roughly USD 600,000.

-------------- --
BofA APPARENTLY FAILS TO PROPERLY REQUEST FREEZE
-------------- --


3. (SBU) HSBC Yerevan CEO Nick Gilmour told us that his bank
had automatically notified the Central Bank of Armenia (CBA)
of the large transfer of funds on Monday, August 2, as
required by Armenian law. He also noted that the Bank of
America had contacted HSBC London to request the funds be
frozen, at which time he had outlined the procedures
necessary under Armenian law. Gilmour noted that the Bank of
America had not pursued the necessary legal channels, and
simply had repeated their informal request the next day.
(Note: Armenian banks are required to make funds available
for withdrawal within 24 hours to comply with a court order
or if the CBA submits a written request for an injunction
followed by a court order. End Note.)

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EMBASSY ACTION FREEZES SUSPECT ACCOUNT
--------------


4. (C) The Embassy and the National Security Service (NSS)
are cooperating closely in this case. Charge spoke
personally with the Central Bank Chairman Vache Gabrielyan to
request urgent CBA action to freeze this account pending a
more formal request from appropriate USG agencies. The
Central Bank subsequently froze the account, preventing the
withdrawal of USD 300,000.


5. (C) While we succeeded in getting timely CBA support to
freeze this account, this action is not permanent. Unless we
can provide appropriate documentation to the GOAM requesting
a more permanent action, this step could be reversed. The
Armenian NSS has agreed to continue to surveil the account
holder, but it would require significant effort and legal
action before the disbursed funds could be recovered.
GODFREY