The Prosecutor General`s Office of Armenia accuses the founder of the Medline clinic of embezzling 263 million drams and laundering more than 920 million drams

ArmInfo. Babken Shahumyan, founder and director of the Medline clinic, is accused of embezzling 263 million drams in public funds and laundering over 920 million drams during the COVID-19 pandemic.

According to the press service of the Prosecutor General's Office of Armenia, the case of embezzling 263 million drams has been heard in the Anti-Corruption Court of Armenia since 2024. According to the source, more than 60 court hearings have been held and over 300 witnesses have been questioned as part of the proceedings. According to the Prosecutor's Office, the investigation revealed that Babken Shahumyan organized the falsification of over 820 medical records. "The medical records indicated that the health of the citizens undergoing treatment had allegedly worsened and they were transferred to the intensive care unit." However, witnesses questioned during the investigation stated that no such transfer actually took place, and they received treatment in the therapeutic department," said Koryun Serobyan, Head of the Department for Confiscation of Illegally Produced Property at the Prosecutor General's Office of Armenia.

According to investigators, the defendants took advantage of the fact that the Armenian Ministry of Health allocates significant sums for the treatment of patients in intensive care units. From 2020 to 2022, according to the Prosecutor's Office, the clinic received an additional 263,480,000 drams for services that were not actually provided through falsified medical records.

A separate episode of the investigation concerns the alleged laundering of over 920 million drams. According to the Prosecutor General's Office, Shaumyan and the director of the same company, Hayk Movsisyan, were involved in this scheme. Samvel Hakobyan, Head of the Economic Crimes Department, reported that in 2020, Medline LLC, represented by Director Hayk Movsisyan, and Babken Shahumyan, who owned 50% of the company's shares, entered into a fictitious service agreement. The prosecutor's office explained that, based on this agreement, significant sums were transferred to Shahumyan in 2020-2021, and a payment of 20% of the company's annual profit was also provided. According to the investigation, this amount amounted to 307 million drams in 2020 alone. "In 2021-2022, as part of the same transaction, approximately 480 million drams were transferred to Babken Shahumyan's personal accounts. These funds were mixed with existing funds in the accounts, including the allegedly stolen funds, after which they were cashed and transferred to Shaumyan," Hakobyan reported.

Another incident, according to the source, concerns alleged fictitious lease agreements between the Medline clinic and the American company Cascade Ventures. According to the Prosecutor General's Office, in December 2019, the parties entered into an agreement purportedly renting a 200-square-meter space in the United States to implement the "Healthy Homeland" program. According to Hakobyan, the agreements were used for tax evasion and money laundering. As a result, in 2020-2021, the Medline clinic, according to investigators, transferred more than 110 million drams, equivalent to $220,000, to Cascade Ventures. Furthermore, as part of the same incident, according to the prosecutor's office, Shaumyan received approximately 487 million drams in cash from the clinic, allegedly for advance payments and rent. "In 2021, a document was also executed between the companies, according to which Cascade Ventures received $960,000 in cash from Shaumyan. This document was also untrue. "The relevant information was obtained from competent US authorities, as well as on the basis of data material to the proceedings," Hakobyan noted.

According to the investigation, to conceal the alleged actions of Shahumyan's close relative, he was registered as an employee of the Medline clinic, although he never actually went to work. "Moreover, Hayk Movsisyan signed a fictitious document sending his relative to the US. As part of this incident, Shahumyan received 40 million drams in cash from the company," the Prosecutor General's Office of Armenia reported.

The head of the Economic Crimes Department also reported that as a result of these actions, the clinic was able to avoid paying 307 million drams in taxes. He added that this amount was recovered during the preliminary investigation.