Posted on April. 1. 2022
BY HARRIET RYAN, MATT HAMILTON
MARCH 23, 2022 | LOS ANGELES TIMES
They were bayoneted in their homes. Drowned in the Black Sea. Shot. Tortured in front of crowds. Forced to convert. Forced into prostitution. Burned alive. Poisoned. Driven into the desert to die of thirst. Their bodies were thrown in pits, torched, eaten by dogs and picked over by vultures.
By many estimates, a million Armenians died in the Ottoman Empire between 1915 and 1920, one of the first genocides in a century that would be defined by mass killings. Ignored by most of the world and denied by the Turkish government, the Armenian slaughter was considered for generations a “perfect genocide,” its victims forgotten, its perpetrators unpunished.
Then, in the mid-2000s, court cases in Los Angeles, home to one of the largest Armenian communities outside Armenia, delivered a measure of justice that history had long denied. Three Armenian American attorneys sued to collect life insurance policies on victims of the genocide, and came away with a pair of class-action settlements totaling $37.5 million. Finally, in an American courtroom, the genocide was treated as fact.
In the decade that followed, however, the much hoped-for reparations devolved into a corrupted process marked by diverted funds and misconduct that even the lawyers involved characterized as fraud, The Times found in an investigation that drew on newly unsealed case filings, other court documents, official records, and interviews.
More than $1.1 million in a settlement with a French insurer was directed at various points to sham claimants and bank accounts controlled by a Beverly Hills attorney with no official role in that case, according to court filings and financial records. A French foundation that was supposed to distribute millions in settlement funds to charity was never set up, and some $1 million of that money ended up at Loyola Law School, the alma mater of two attorneys in the case, according to an accounting provided by the school.
In addition, Christian churches that were supposed to get hundreds of thousands of dollars in settlement funds told The Times that they did not receive the money.
Armenians who stepped forward to collect on ancestors’ policies in the settlement with the French insurer had their claims rejected at an astonishing rate of 92%, court records show. Applicants were denied despite offering convincing evidence such as century-old insurance records, birth certificates, ship manifests, hand-drawn family trees and copies of heirloom Bibles.
“It was for us blood money — blood of the people killed in the genocide,” said Samuel Shnorhokian, a retired French businessman who served on a court-approved settlement board and has tried for years to persuade the FBI and other agencies to investigate. “We never thought there would be misappropriation of funds.”
(Family photo is from a document submitted by an applicant in the AXA settlement case.)
The insurance settlements had their origin in the bedtime reading of a Glendale lawyer named Vartkes Yeghiayan. It was 1986, and many Armenian Americans were worried about keeping the memory of the genocide alive. Few Americans had heard of the massacres, and then-President Reagan refused to even support a day of commemoration for fear of angering Cold War allies in Turkey.
Yeghiayan, the son of a genocide survivor, was plodding one night through the memoirs of a former U.S. ambassador to the Ottoman Empire when he stumbled on a passage about victims’ life insurance policies.
Ambassador Henry Morgenthau Sr. wrote that in the middle of the slaughter, the Turkish interior minister had demanded a list of Armenians with American life insurance, saying, “They are practically all dead…. The government is the beneficiary now.”
At home in Glendale, Yeghiayan leapt up, as he later recalled in speeches and interviews, exclaiming, “There is a list! We have to find this list!”
He spent much of the next 13 years researching the policies. He placed ads in Armenian newspapers seeking families who held on to ancestors’ insurance documents, and combed through archives in Washington; Geneva; Aleppo, Syria, and elsewhere. He found a 1919 letter in which a lawyer for New York Life estimated the potential cost of the mass killings of Armenian customers at $7 million, a sum equal to more than $100 million in today’s dollars. Yeghiayan believed the carrier had not paid the victims’ heirs.
Glendale attorney Vartkes Yeghiayan, foreground, with clients in 2001. He spent more than a decade researching and preparing lawsuits to collect on life insurance policies for victims of the Armenian genocide. For Yeghiayan, the son of a genocide survivor, the cause would become his life’s mission.
(Robert Gauthier / Los Angeles Times)
He came to see collecting those policies as a way to not only compensate families, but also to establish the genocide as beyond dispute. In those years, his quest for justice was lonely and low-budget. At one point, Yeghiayan used the Glendale Public Library to print 594 pages of microfiche records, feeding dime after dime into the machine. His already modest law practice suffered. He fell behind on his taxes and filed for bankruptcy.
Finally in 1999, Yeghiayan had enough evidence for a lawsuit against New York Life. Three years later, he sued the French insurance giant AXA.
Facing down global corporations with squadrons of well-paid attorneys, Yeghiayan recognized he needed a legal gun of his own.
Mark Geragos was then a rising star in L.A. law. He practiced mainly criminal defense at his family’s downtown firm, and he had attracted national press representing Clinton family associate Susan McDougal during the Whitewater investigation. In the years that followed, he amassed a clientele that kept him in the spotlight, including Winona Ryder, Michael Jackson and murderer Scott Peterson.
At Yeghiayan’s invitation, Geragos signed on to the insurance litigation in 2001. The team already included up-and-coming class-action lawyer Brian Kabateck, who would go on to become a prominent plaintiff’s attorney and president of the L.A. County Bar Assn.
The three attorneys were Armenian Americans, part of a proud and active L.A. ethnic group of more than 200,000, and the genocide cases offered them an attractive combination of community service and financial gain. When the insurers agreed to pay — New York Life, $20 million in 2004; and AXA, $17.5 million a year later — more than $7 million went to legal fees and associated costs, court records show.
Both settlements mandated that the lion’s share of the money would go to individuals who could produce evidence they were descendants of the Armenian policyholders. Beyond that, charities serving the Armenian community would get $3 million, along with whatever money was left over after paying descendants.
The New York Life case ran smoothly with a committee of prominent L.A. Armenians appointed by the state insurance commissioner, including current City Councilman Paul Krekorian, vetting applications. People submitted government records and accounts of how relatives perished and survivors rebuilt lives in Fresno; Yerevan, Armenia; Marseille, France; Beirut and elsewhere. One family sent a piece of fabric from the tent their grandmother had slept in after being marched into the desert to die. Another shared a photo of its patriarch standing in front of his sewing machine shop in Harput in the Ottoman Empire, in a region of modern-day Turkey.
Ultimately, the committee approved 44% of claims, according to a news release.
Attorneys Mark Geragos, left, and Brian Kabateck in 2004. Vartkes Yeghiayan, the attorney who initiated the litigation, realized he needed help going up against New York Life and the French insurance giant AXA, and he turned to Geragos and Kabateck. The three Armenian American attorneys would win settlements totaling $37.5 million. But where some of that money ultimately ended up angered descendants of genocide victims and others.
(Nick Ut / Associated Press)
It was in the second case that red flags emerged. That settlement, with Paris-based insurer AXA, designated up to $11.35 million for descendants. Decisions about whether applications were legitimate or not were to be made by a board of three prominent French Armenians, according to the settlement terms and court filings.
Months before the French board’s appointment, the attorneys — Kabateck, Yeghiayan and Geragos — established important parts of the approval process in Los Angeles, according to court records and lawyers’ emails later turned over to authorities.
They installed as settlement administrator — the coordinator of the claims process — a courtroom interpreter from Glendale who had helped run the New York Life settlement. They instructed him to hire staff and set up operations in downtown L.A., in the same Wilshire Boulevard office used for the New York Life case.
The arrangement put the process of deciding who got money 6,000 miles from Paris, making it difficult for the French board to provide any meaningful oversight.
“The fact we were in France, we didn’t know how they were working and what they were doing,” said Shnorhokian, the board member and retired Parisian executive.
“It was practically impossible,” said board member Jean-Charles Zaven Gabrielian, a surgeon in Marseille. The board did not object to the process or to the selection of the settlement administrator because, as Gabrielian explained: “I trusted them.”
An email Kabateck wrote to the two other lawyers in 2008 suggests they saw a particular benefit in preserving that trust: “It is important to keep good feelings from the board; it will be easier later to persuade them to be conservative on their claims decisions.”
As it turned out, the process set up in L.A. resulted in a tiny fraction of applicants receiving money and a pool of cash left over.
The Times requested interviews with Geragos and Kabateck about the litigation; Yeghiayan died in 2017. Neither attorney agreed to speak with reporters, but each provided written responses.
Shant Karnikian, a law partner of Kabateck, said in a letter to The Times that the instances of fraud that emerged later in the handling of money were a result of the actions of others, including the settlement administrator and another attorney.
Asked about the email referencing a need for the board to be “conservative,” Karnikian said the attorneys wanted to ensure claims were “not just unconditionally rubber-stamped” for approval.
“Class counsel worried about unsubstantiated (and potentially false) claims being liberally approved thus reducing the overall amount left for legitimate substantiated claims,” Karnikian wrote.
(Photo illustration by the Los Angeles Times. Family tree drawing is from a document submitted by an applicant in the AXA settlement case.)
Some class-action lawsuits are straightforward. Lawyers win a pot of money for a group harmed by a company or organization. Consumers get a notice in the mail that they are eligible for a payout. They sign a form and receive a check.
Deciding who got money from the genocide cases was more complicated. Armenians who fled the massacres often left everything behind, including insurance documents. Families scattered across continents, their names altered by immigration authorities or the alphabet of their new home. Stories were passed down, but with each passing generation, there were fewer people with firsthand information.
In an apparent acknowledgment of the unusual circumstances, the AXA settlement set a low bar for approving claims. Though the ultimate decision belonged to the board, the terms stated that if an applicant submitted as little evidence as a sworn declaration outlining how he was a rightful heir to a listed policyholder, it could be considered sufficient proof for payment.
But when French board members made a brief visit to L.A. in March 2008 to get a briefing on the claims process they were ostensibly supervising, they said they were told that much stricter criteria were already in use for preliminary decisions. Applicants had to correctly identify the city of residence their long-dead relatives had listed in insurance records to be considered for approval. If they got the city wrong, the application was rejected — no matter the other evidence presented.
Samuel Shnorhokian, a retired French businessman, served on a court-approved board that would help decide whether descendants’ settlement applications were legitimate or not. He and other board members felt left out of the process and grew concerned about its fairness and whether funds were being misappropriated. Shnorhokian has tried for years to persuade the FBI and other agencies to investigate.
Shnorhokian, the French board member, said the attorneys told him and his colleagues that this was the same standard used in the New York Life evaluations. That was not true, according to board members for the New York Life claims. They said in interviews that evaluators used a holistic approach based on submitted records and did not disqualify applicants solely for incorrectly identifying the city of residence.
Asked about the city-of-residence requirement, Kabateck’s law partner, Karnikian, said, “Any such criterion was not — and could not be — imposed by class counsel.”
The new criterion appears to have had a profound effect: Accountings in court records show that less than 8% of AXA claims applications were approved for payment. One result of the low approval rate was that millions of dollars in the settlement accounts could be used, per the wording of the settlement, for charitable purposes.
Those rejected on the city-of-residence basis included people who had provided what appeared to be overwhelming evidence that they were rightful heirs, according to archived files reviewed by The Times in recent months. Some who were denied had sent copies of their ancestors’ insurance policies — among the strongest possible proof that they had valid claims. The archived files suggest evaluators dismissed applications without reviewing the evidence, writing: “cities don’t match.”
Even when evaluators took the time to go through the documents, the city of residence overrode other evidence. Sylvia Bergin, a British retiree, submitted a claim for her grandfather’s policy with copies of birth certificates, police records and passports. The evaluator in downtown L.A. found Bergin’s application convincing, writing in her file “it is evident” she was the granddaughter of the policyholder.
“However, the place of residence of the insured … and the place of residence on the claim form (Rodosto, Turkey) do not match,” the evaluator wrote. Her claim was rejected.
Told of the evaluation by The Times, Bergin disputed that she had gotten the city of residence wrong, noting that she and her parents had visited her grandparents’ former home in Rodosto in the 1970s.
“It makes me sick,” Bergin said. “They are Armenians supposedly acting on behalf of Armenians, and things are not done right.”
The settlement administrator, Parsegh Kartalian, declined to answer questions, saying he had memory loss from brain surgery and other medical problems.
As the evaluation process drew to a close in 2009, the L.A. office shipped the French board about a quarter of the claims for review. Though the wording of the settlement vested board members with the power to approve and deny claims, they had played almost no role in evaluating applications to that point. As they read through the sampling of files from L.A., the board members concluded that many marked for rejection should be approved.
When they tried to correct what they saw as errors, Geragos intervened and warned the French board members in a letter that they might be sued. He wrote: “It is our recommendation that the Settlement Board immediately reassess the purported approval of claims.”
The board stood down.
(Photo illustration by the Los Angeles Times. Insurance record is from a document submitted by an applicant in the AXA settlement case.)
Decision letters from the AXA case started going out to Armenians around the world in early 2010. The vast majority carried bad news: 12,795 out of 13,856 applications were rejected.
The uproar was swift.
“Who received my grandfather’s insurance sum instead of me if I had sent all needed documents which proved that I am the heir of the Insured,” an indignant applicant wrote to the lawyers in one of many complaint letters submitted to U.S. District Judge Christina Snyder.
Another denied applicant wrote that he had sent 23 records to prove he was a descendant and had been counting on the money for heart surgery.
“My paternal grandparents were beheaded at my father’s presence,” he wrote. “Honestly I’m so disappointed.”
Many complained that they were denied while close relatives received checks. In one instance, twin sisters and their brother in Armenia sent nearly identical applications on the same day from the same post office, according to another letter. Only one sister was approved.
“Our sister doesn’t want to share her money with us! She thinks that is not her problem but yours!” the man wrote.
Six cousins trying to collect on their grandfather’s policy said they had used similar proof, yet only three received checks. A cousin in Cyprus fumed, “Is there any possible legal explanation … because we are all baffled!”
Armenia’s Ministry of Justice, which had helped citizens prepare their applications, also wrote to the judge in L.A. in June 2010, saying officials were “extremely dissatisfied” and wanted court intervention.
“Otherwise it is not clear what the purpose of this process was,” the ministry wrote.
In his law office on Brand Boulevard, Yeghiayan, the man who had dreamed up the litigation, became increasingly distraught. He was deluged with calls, emails and letters. Furious Armenians denounced him and the other lawyers as “worse than Turks,” he emailed Kabateck and Geragos. The heroic cause that had been his life’s mission was falling apart.
Attorneys Brian Kabateck, left, and Mark Geragos in 2008. Shant Karnikian, a law partner of Kabateck, said in a letter to The Times that the instances of fraud that emerged in the handling of settlement money were a result of the actions of others, including the settlement administrator and another attorney.
(Rick Loomis / Los Angeles Times)
Yeghiayan trained his frustration on the other attorneys. He filed an emergency motion asking the judge to order an independent audit of the settlement, alleging Geragos and Kabeteck had splurged on first-class travel and treated the descendants’ money as “petty cash.”
The accusations seemed to enrage Geragos, who excoriated Yeghiayan in an email: “Your motivation in making these defamatory and knowingly false statements is driven solely by your desperate financial situation.”
Geragos and Kabateck told the judge in a lengthy filing that Yeghiayan did “not have a scintilla of proof” and, regardless, the settlement didn’t allow revisiting the claims decisions. They reassured the judge that to them, this was “more than just a class action.”
“It is a sacred task that Brian Kabateck and Mark Geragos are honored to prosecute on behalf of the Armenian people,” they wrote.
The judge, Snyder, turned down the request for an independent audit. She declined to answer questions about the litigation, saying through a deputy that the judicial code of conduct prohibited her from commenting.
(Family photo is from a document submitted by an applicant in the AXA settlement case.)
In February 2011, the French board received an email from L.A. that stopped them cold. Kabateck and Geragos wanted to dissolve the settlement board and destroy the claims files that had come in from around the world, part of the materials they described as “any and all files and non-historic documents.”
Those same materials in the New York Life settlement had been deemed so precious — in the lawyers’ description, “a wealth of historical data that record the Armenian genocide” — that they were under lock and key at USC’s Shoah Foundation for future scholarly research.
Beyond the cultural value, the board saw the records as central to ensuring that mistakes hadn’t been made. Though the claims office was by then closed, the board was still looking into complaints and had asked to review records related to which applicants were paid and which were not.
Troubled, the board refused to sign off on the shredding of documents. Instead, members promised to travel to L.A. to investigate.
Kabateck’s response unsettled them further. He emailed that he was too busy to meet and that Geragos had taken over, writing, “My file is closed.”
“Rat fleeing a sinking ship,” Yeghiayan remarked to a French board member in an email later turned over to authorities.
Kabateck’s law partner, Karnikian, offered no explanation for the email to the French board seeking to destroy the documents. The subsequent filing to the judge for permission to destroy the documents was “a misunderstanding,” likely by junior lawyers who prepared the brief, Karnikian said. He claimed the filing was “withdrawn within hours.” A review of the docket shows the filing was never withdrawn and was discussed at hearings and referenced in other court documents for years afterward.
Alarmed by the attempt to close down the settlement process and dispose of the records, the French board went directly to the judge, asking in a letter that the files be “kept safely” until members could come to Southern California. At an April 2011 hearing, the board laid out its complaints in person. Snyder, the judge, agreed the board should have a chance to review the records.
It wasn’t long before serious irregularities were discovered.
(Photo illustration by the Los Angeles Times. Family photo is from a document submitted by an applicant in the AXA settlement case.)
Of the hundreds of Armenians approved for compensation from the AXA fund, a Syrian named Zaven Haleblian stood apart. He was awarded $574,425, more than any other individual, according to a settlement database later provided to authorities, court records and filings with the State Bar of California.
Yet as the French board soon learned, Haleblian had never heard of the AXA settlement, let alone applied for it.
With the files and bank records, the French board and Yeghiayan started working together to unravel where the money went in the AXA settlement. The Glendale lawyer tracked down Haleblian in Aleppo and arranged for him to be questioned under oath in the U.S. During a deposition, he expressed shock that checks had been issued in his name. He said he had never heard of the supposed ancestors — members of the Funduklian family — listed for him in the settlement database.
Another area Yeghiayan and the French board investigated was a secret bank account. Kabateck and Geragos had provided the French board and later the judge with a Pacific Western Bank statement showing that of the original $11 million to pay claims and administrative costs, just $346,050.62 was left over.
But after the French board got access to the settlement financial records, Geragos and Kabateck disclosed to the judge a second account at Comerica Bank containing an additional $2.5 million.
Parsegh Kartalian was the settlement administrator in the AXA case. He issued more than $300,000 in checks from settlement money to his own relatives, including his wife and mother-in-law. Kartalian declined to answer questions, saying he had memory loss from brain surgery and other medical problems.
(Aram Arkun / Armenian Mirror-Spectator)
The lawyers said then that they too had been in the dark about its existence and pointed the finger at Kartalian, the settlement administrator. In a declaration they submitted on his behalf, Kartalian said he had moved the money to secure a better interest rate and had not informed the attorneys.
Further investigation turned up more questionable recipients who were awarded hundreds of thousands of dollars.
Five checks totaling more than $400,000 were made out in the name of Ashot Mkhitarian, an Armenian Christian supposedly living in Baghdad, according to court and financial records. Contacted by Yeghiayan and his associates, the Armenian and Iraqi governments were unable to confirm his existence, and a person dispatched to the address listed in the claims database found a Sunni Muslim neighborhood where no one had heard of Mkhitarian, according to accounts in court records, a hearing transcript and research turned over to authorities. Bank records showed some of the checks in Mkhitarian’s name were converted into cashier’s checks in Southern California.
Additionally, the settlement administrator, Kartalian, had issued more than $300,000 in checks to his own relatives, including his wife and mother-in-law.
Settlement checks for Ashot Mkhitarian and Zaven Haleblian. Five checks totaling more than $400,000 were made out in the name of Mkhitarian, whose existence has not been confirmed. Bank records showed some of the checks in Mkhitarian’s name were converted into cashier’s checks in Southern California. Haleblian was awarded $574,425, but he had never heard of the AXA settlement, let alone applied for it.
(Los Angeles Times photo illustration)
When the board and Yeghiayan tried to look at the underlying records for Kartalian’s relatives to verify they were entitled to payments, those files were missing. There were also no files for the Syrian, the Iraqi or dozens of others who had been sent large checks. The absent files represented about $2 million in awards, according to an analysis presented to the court. The files were never located.
Asked under oath whether he had an explanation for the missing files, Kartalian replied, “I don’t,” according to a deposition transcript. He was not questioned about his relatives’ eligibility for payment.
In a recent review of AXA files archived in more than 50 bankers boxes at the Loyola Law School library, The Times uncovered additional irregularities. Applications that evaluators had described as valid were stamped “DENIED” while other claims they deemed flimsy were stamped “APPROVED.”
A suburban Atlanta woman, June Howard, applied for payment under 17 different policies she claimed were held by relatives of an Armenian grandfather who immigrated to the U.S. before the genocide.
Evaluators were dubious, with one writing of her application to collect on the policy of a man named Bedros Bozian: “Many different documents were provided by the claimant, however, none of the documents displayed any kind of link between the insured and the claimant.”
Nevertheless, that claim was approved for payment, as were 26 other claims for Howard and other family members. All told, the family was awarded nearly $100,000.
Howard died in 2019. Family members initially agreed to an interview but stopped responding to emails after receiving a list of questions.
Geragos and Kabateck said they were not to blame for problems in the claims process. It was the French board and “their fund administrator” who were in charge, they told the judge.
“We had nothing to do with that process at all,” Kabateck said at a 2011 hearing.
(Family photo is from a document submitted by an applicant in the AXA settlement case.)
What many of these irregularities had in common was the involvement of Berj Boyajian, a Beverly Hills lawyer.
Studying the bank records, the board and Yeghiayan saw Boyajian’s signature again and again on the backs of AXA checks made out to other people. Settlement checks totaling $312,000 had ended up in his law firm’s accounts, court filings and canceled checks show.
Boyajian was no stranger to the Armenian genocide litigation. He had served on the New York Life claims board, had a law practice in the same building as the AXA settlement claims office, and was acquainted with several evaluators, including a niece and relatives of close friends.
But he had no official role in the AXA case, and how and why he became enmeshed in the claims money would be a subject of dispute.
Questioned under oath, the person who would be expected to have firsthand information about what Boyajian was doing, the settlement administrator Kartalian, described Boyajian as a consultant with no role in claims decisions.
He could not explain how Boyajian had gotten hold of the checks or the master list of claimants, a confidential database that even Yeghiayan couldn’t obtain, according to deposition testimony and an account Yeghiayan gave in court.
Boyajian had endorsed about $90,000 in checks issued to the wife and mother-in-law of Kartalian, along with a $23,805 check made out to the sister of one of his best friends, former state legislator Walter Karabian, according to court filings.
In the case of Haleblian, the Syrian resident who had not applied for settlement money, it turned out that Boyajian was a childhood friend and the half-million dollars in checks had ended up in an L.A. bank account Boyajian had opened in Haleblian’s name without his knowledge, according to Haleblian’s deposition.
After questions were raised with the court, Boyajian hired a criminal defense attorney. Subpoenaed to testify under oath, he invoked his 5th Amendment right against self-incrimination and refused to answer lawyers’ queries.
He later told the State Bar that he believed he had a right to certain settlement funds because he had reached a side deal with Geragos and Kabateck to help coordinate the AXA claims. In exchange, he said, they agreed to let him direct 25% of the charity money to causes he selected. Emails turned over to law enforcement show the lawyers discussing the deal. Kabateck’s law partner said he never agreed to it.
Boyajian claimed to the State Bar that he fished some of the checks out of mail returned to the claims office and deposited them in his law firm account so they wouldn’t become “stale” and “uncashable.”
In an interview last year at his mansion overlooking Trousdale Estates, Boyajian said he had no motive to embezzle from the settlement. Gesturing to his opulent home and swimming pool, he said, “I am not a poor guy and I don’t need $100,000 or $200,000 to steal from anybody.”
He could not explain the Syrian’s checks, but admitted one error, transferring $150,000 in settlement funds to a high-end downtown jeweler. As Boyajian told it, the jeweler was a friend who needed a bridge loan to buy a diamond for a ring that a customer, L.A. lawyer Tom Girardi, wanted to give his wife, Erika. Boyajian said the amount was eventually paid back.
Kabateck’s law partner blamed Boyajian for many of the problems in the settlement, including the missing files, which, he said, “Boyajian likely removed … in an attempt to hide his fraud.” Boyajian denied that, saying in a recent interview that Kabateck was seeking to rewrite history and “is lying through his teeth.”
Boyajian called his own behavior “stupid.” He could not offer a firm description of the role he was supposed to play in the settlement, remarking at one point, “I really don’t know what my function was.”
What is clear is that he had a long-standing relationship with a permissive banker.
Avedis “Avo” Markarian had been Boyajian’s personal banker for decades at a series of institutions and was working at Pacific Western in downtown L.A. at the time of the AXA settlement.
Interviewed outside his Pasadena home, the banker said that Boyajian brought him stacks of checks for processing, and that because of their long relationship, he did not review them closely before sending them to a check processing facility in Santa Fe Springs.
Markarian left the bank before Pacific Western’s role in the AXA irregularities came into focus. He said he was terminated for reasons unconnected to the case, but acknowledged it changed how he did business. “I am more cautious,” he said.
(Photo illustration by the Los Angeles Times. Family tree is from a document submitted by an applicant in the AXA settlement case.)
Geragos and Kabateck had initially rejected the idea of auditing the claims. But after the French board went to the judge, the attorneys said they too wanted to get to the bottom of the problems.
Geragos told the judge the following year that Boyajian’s attorney had reached out and said his client was prepared to repay some of the money. About $700,000 was eventually returned. Boyajian said he had passed the rest of the money on to the rightful claimants.
In his Glendale office, Yeghiayan took a dim view of Boyajian’s repayments.
“A crime has been committed. Now are we hoping to make a deal that would cover up the theft?” Yeghiayan steamed to his attorney in an email.
By that point, the man who started the entire legal endeavor had himself come under scrutiny. Geragos and Kabateck had sued Yeghiayan and his wife, also a lawyer.
They accused the couple of “a shameful scheme to personally loot” charity money from the genocide settlements. Nearly $300,000 distributed to their genocide education nonprofit had been redirected to their daughter, Yeghiayan himself or their law firm. That amount included $11,000 that went toward his children’s law school tuition.
Yeghiayan and his wife saw the suit as retaliation for his whistleblowing, as she later testified. The couple defended the payouts, saying that the charity did important work and that the payments, which the nonprofit’s board approved, were appropriate because their family had labored for free for years before the AXA settlement provided retroactive compensation.
Judicial officers at the State Bar later offered some backing for that claim, finding evidence the charity had “many legitimate activities.” A panel of State Bar judges ruled it was “undisputed” that Yeghiayan had lent the nonprofit money and that his wife and children “did considerable work … and incurred expenses.”
Yeghiayan returned $31,000 and settled the lawsuit in 2013. He felt that the accusations tainted his reputation in the Armenian community. Yeghiayan’s widow, Rita Mahdessian, did not return messages seeking comment.
The terms of the settlement limited what Yeghiayan could say and do about problems in the AXA settlement. An expansive nondisparagement clause barred public statements about Geragos, Kabateck and their employees.
But Yeghiayan was undeterred. With a handful of young assistants in his Glendale office, he assembled a dossier of emails, bank records and court filings and prepared a 20-page memo of his allegations against Geragos, Kabateck, Boyajian and others that he titled “AXA Fraud — A Chronological Narrative,” according to a copy of the materials turned over to law enforcement and reviewed by The Times.
Emails suggest Yeghiayan made a series of approaches to the U.S. attorney’s office and the FBI, beginning in 2012. Spokespeople at both agencies declined to comment, citing a policy of not confirming or denying investigations.
(Family photo is from a document submitted by an applicant in the AXA settlement case.)
Representatives for both Kabateck and Geragos noted that there have been no criminal charges against them or findings of wrongdoing on their part.
Ben Meiselas, a partner at Geragos & Geragos law firm, called the newspaper’s questions about the case “all defamatory, wrong, bizarre.”
“These recycled conspiracy theories have been rejected on multiple occasions by both inside and outside counsel for the State Bar, both local and state authorities and the presiding Federal Judge,” Meiselas wrote in an email.
It’s not clear whether federal authorities even considered Yeghiayan’s allegations.
Yeghiayan told his lawyer in a 2013 email that the FBI had gotten back to him with disappointing news. The agent said that “no investigation will be forthcoming” unless the judge herself formally referred the matter to the U.S. Justice Department.
Judge Snyder had overseen the genocide litigation since 2000, and she was clearly exasperated when the French board raised concerns to her in 2011, saying the problems “should have been brought to my attention much earlier.”
“Let me be blunt,” she said after the board suggested that up to $5 million might be missing and that it was up to the judge to sort it out. “I have 350 other cases, and I am not going to undertake a general audit of what has occurred.”
That was one of at least five times that Yeghiayan, the French settlement board or heirs of policyholders asked Snyder to order a head-to-toe review of the settlement.
She resisted, saying some of those audit requests deviated from proper legal procedure and citing concerns that the cost of a fulsome investigation would eat up what remained of the money intended for Armenian heirs or charities. She was encouraged in this view by Kabateck and Geragos.
“They would like to go back and peel back this onion. We don’t know how far to keep peeling it back,” Kabateck told her at a 2011 hearing, where he argued against further investigation and urged the judge to “get this process resolved so that we can then, you know, close this claim process down.”
Snyder greenlighted some investigative efforts, ordering banks to turn over records and signing off on depositions of the settlement administrator and others. At one point, she permitted an accounting firm to analyze about 200 approved claims. The review was limited — it did not look at whether individuals should have been approved in the first place — but it uncovered significant problems. Checks totaling more than $1.4 million had been issued but never cashed, while checks for $500,000 due claimants had never been issued, according to the accountant’s report filed with the court.
Snyder considered involving law enforcement, but explained at one hearing, “I don’t take lightly the matter of making referrals to prosecutors.”
U.S. District Judge Christina Snyder oversaw the genocide litigation. She was urged to order a head-to-toe review of the AXA settlement. Snyder considered involving law enforcement, but explained at one hearing, “I don’t take lightly the matter of making referrals to prosecutors.”
(U.S. District Court for the Central District of California)
She was also cautious about reporting Boyajian to the State Bar, the public agency responsible for policing the legal profession, despite evidence that he had misappropriated hundreds of thousands of dollars, according to transcripts and court filings.
Agency officials were ready to investigate if Snyder made a formal referral, according to a joint filing in 2013 by Kabateck, Geragos and Yeghiayan. They said that as a group they supported her doing so. But Snyder stated at a hearing that she didn’t “know enough of the facts to tell any of you at this stage that I’m prepared to do anything.”
When the issue came up a few months later, Snyder ordered the attorneys to give her written assessments of Boyajian’s misconduct with an eye toward referring him to the State Bar, according to court documents and transcripts. The judge sealed the lawyers’ recommendations, as she had with dozens of other sensitive documents in the case.
The Times successfully petitioned Snyder last year for access to the records. Geragos was the lone attorney who opposed making the documents public.
The newly unsealed documents show that Geragos argued against referring Boyajian to the State Bar, writing that “allowing an investigation at this point” might hinder efforts to recoup money from him. The judge appeared persuaded, ruling that “a referral should not be made at this time.”
As the proceedings dragged on, the deadline to file charges against Boyajian related to the AXA money drew closer. By the time the L.A. County district attorney’s office looked into the allegations in 2016, the statute of limitations for fraud and other serious counts had passed, according to a State Bar filing by Boyajian’s attorney. Boyajian pleaded no contest to a felony and a misdemeanor charge in connection with making false claims to the State Bar and ultimately served no jail time.
“We thought [the misappropriation allegations] should have been referred to the U.S. attorney to investigate,” recalled Lee Boyd, a former Pepperdine Law School professor who was the attorney for the French board. “Once the judge said no, it is over. And I had to accept that.”
In spring 2014, as Kabateck and Geragos were pushing to close out the settlement process, they asked the French board to sign a release that would prevent the board from ever suing the lawyers. The board members refused, to the annoyance of Geragos, a transcript shows.
“The settlement board, as they’ve continued to do throughout this, has caused even more problems, and it’s almost the tail wagging the dog at this point,” Geragos complained to the judge. As a consequence of their refusal, he suggested, the judge should slash a planned $30,000 reimbursement for their travel, legal and administrative costs.
Snyder gave them $3,000, noting that she had been “trying to avoid appeals and wrap things up.”
At the same time, the judge awarded the lawyers an additional $1 million in legal fees and costs for what she described as extra work to ensure “a proper accounting and recoupment of misdirected settlement funds.” Geragos’ firm alone received $450,000.
Snyder officially closed the case in 2016. Two years later, Kabateck presented her an award on behalf of the Armenian Bar Assn.
“Every judge should take lessons from the Honorable Christina Snyder. She is patient with everyone but still has control of her courtroom, and she knows the law inside and out,” Kabateck said at the 2018 banquet.
After applause, Snyder called her presiding over the genocide litigation “a remarkable experience.”
(Photo illustration by the Los Angeles Times. Letter is from a document submitted by an applicant in the AXA settlement case.)
No community had been more excited about the AXA settlement than the approximately 600,000 ethnic Armenians who lived in France. In a victory tour to Paris after signing the agreement, Geragos, Yeghiayan and Kabateck told French Armenian charities that they would receive at least $3 million under the settlement, according to interviews and published accounts.
“I really thought they were heroes,” said Ara Toranian, a journalist and leader of a consortium of Franco Armenian civic groups.
The L.A. attorneys told nonprofits to draw up proposals for how they might spend the windfall and eventually received more than 100 pounds of paper applications, recalled Shnorhokian, the French board member.
The promises the L.A. lawyers made were consistent with the terms of the settlement agreement. It specified that the charity portion of the settlement — an initial $3 million plus whatever was left over from compensating the descendants — would be sent to a foundation set up in France to “advance the interests of the Armenian community.” AXA would write the bylaws for this new charity and the L.A. lawyers would nominate an oversight board to distribute the money.
But the French foundation was never set up. The L.A. lawyers instead handpicked charities to receive the funds intended for the foundation, according to court records and emails among the lawyers turned over to authorities.
There was no amendment of the settlement agreement. At one point, the three attorneys acknowledged in a court filing that they were deviating from the settlement terms, explaining that there was “difficulty” and “confusion” about setting up a French nonprofit, which made it “too costly” to pursue.
But they quickly withdrew the filing and did not publicly revisit the matter.
Kabateck’s law partner, Karnikian, contended that the withdrawn motion “explicitly notified” the judge of the lawyers’ decision to depart from the settlement agreement, and the judge “had no issue with this publicly filed plan” since she did not object. He added, “Neither the court, AXA, the general public, any organization, nor anyone else ever challenged this solution.”
More than $1 million did make it to France-based charities, including hundreds of thousands of dollars to prominent nonprofits such as the Paris chapter of the Armenian General Benevolent Union, or AGBU, as well as smaller grants to cultural groups and schools.
Organizations with no connection to the Franco Armenian community also received payouts.
Kabateck directed $25,000 to Neighborhood Legal Services of Los Angeles County, a nonprofit on whose board he sat, according to a 2010 accounting ledger later turned over to authorities. This gift was not included in the lists of charity donations the lawyers submitted to the judge.
Kabateck’s partner, Karnikian, confirmed that he made the donation without informing the judge, and said he was not required to file a report under the terms of the settlement. Those terms envisioned all of the money being sent to the French foundation for distribution. Karnikian said those served by Neighborhood Legal Services included “the low-income Armenian community.”
Another major recipient of AXA funds was Loyola Law School, a downtown L.A. institution with few ties to France but close ties to the attorneys involved. Geragos and Kabateck were alumni who appeared frequently at campus events and whose firms hired students as clerks and graduates as associates. Kabateck has served for years as the chair of the law school’s board of directors and is a trustee of its parent university, Loyola Marymount. Children of Geragos and Yeghiayan also earned law degrees there.
The law school said it received about $1.4 million from the New York Life and AXA settlements, more than any other single institution. Yet in lists submitted to the judge, the attorneys disclosed $400,000 in donations to Loyola.
The contributions flowed to the school in fits and starts over a nine-year period, arriving in amounts as small as $10,634.68 and as large as $350,000.
In one case, a $350,000 donation identified in court papers as going to well-known Armenian charity AGBU wound up at Loyola. Kabateck’s law partner said AGBU “independently decided” to donate the money to Loyola “upon receipt of the funds.”
A list of donations attorneys Brian Kabateck, Vartkes Yeghiayan and Mark Geragos submitted to the judge in 2010. Church groups told The Times they did not receive hundreds of thousands of dollars they were supposed to receive.
(Los Angeles Times photo illustration)
Emails later turned over to law enforcement show that the attorneys had worked out in advance that the money they told the judge was going to AGBU would quickly be forwarded to the school. AGBU President Berge Setrakian told The Times the funds were sent to Loyola with the “guidance” of the lawyers. The charity “did not know how this disbursement was reported to the court,” its chief financial officer, Mark Gitlen, told the newspaper, adding, “we were not concerned since we believed this contribution would service a worthy cause.”
The cause at Loyola became known as the Center for the Study of Law and Genocide, but its director said it started with smaller ambitions. Stanley Goldman, a criminal law professor who had taught both Geragos and Kabateck, said he had been trying for years to raise a modest sum for a course on the Holocaust, genocide and the law.
When he floated the idea to Kabateck around 2002, the lawyer responded that it was possible he could arrange a charity disbursement of “as much as $50,000 left over” from the anticipated genocide settlements. Goldman said he was surprised when contributions many times that amount kept arriving.
More than a decade later, Goldman is still drawing down that money to operate the center. It supports recent graduates who work in human rights and operates a legal clinic where students help draft amicus briefs in international law cases.
Kabateck’s law partner, Karnikian, asserted that donations to Loyola and other nonprofits without a connection to France were permitted for a certain “tranche” of AXA money. The Times could not find such a provision in the agreement and Karnikian did not provide support for the claim.
What happened to other charity funds remains unclear. The Times could not account for more than $750,000 that the lawyers told the judge had gone to specific religious organizations.
That amount includes $100,000 the lawyers told the judge they were splitting between the Armenian Catholic and Armenian Protestant churches. Officials from both told The Times they had no record of such a donation.
Kabateck’s law partner confirmed that “the money never left the accounts” and said it “was distributed to other charities at a later date.”
There was also a $450,000 donation to an overseas entity of the Armenian Apostolic Church that Geragos listed in a 2010 court filing.
Officials at the denomination’s Paris office and its headquarters in Armenia confirmed they had received other AXA money disclosed in court records: checks totaling $300,000 that Kabateck signed in 2008 and a $50,000 check signed by Geragos in 2010.
But the French church and Armenian headquarters found no record of the $450,000 donation, according to letters given to The Times and separate correspondence previously provided to law enforcement.
Geragos maintained in an email to The Times that he wrote checks on a settlement account and gave them to the church’s local diocese in Burbank, which then transferred the money to Armenia, writing that “all of the money earmarked was accounted for over 10 years ago.” He offered as evidence two redacted statements that showed transfers of $450,000 from a diocese account at Pacific Western Bank with the memo line “Catholicos of All Armenians,” the English term for the Armenian-based leader of the church.
The statements did not identify the recipient of the transfer nor AXA as the source of the funds, and Geragos did not respond to a question about why the church in Armenia said it never received the money.
The Burbank diocese’s executive director declined to provide information about settlement money it received or handled, saying only, “All funds were directed appropriately.”
Geragos had a long relationship with the Burbank-based diocese, and served two decades as its general counsel. About this time, the banquet hall at a diocesan church in Pasadena was renamed for Geragos’ parents, an honor a local newspaper reported was the result of a contribution he had made.
Yeghiayan was concerned that Geragos used settlement proceeds to secure the hall name and outlined those worries to the French board in an email later turned over to authorities, writing, “Now he wants to buy his parents with Axa charity money?”
Markarian, the former Pacific Western banker who was account officer for both the settlement and the Burbank diocese, said in an interview that it did not make sense for settlement checks to be routed through the diocese. The money, he said, could have been wired in a single transfer directly from the AXA account to the church overseas.
(Family photo is from a document submitted by an applicant in the AXA settlement case.)
Last year, after decades of pressure, the U.S. formally recognized the Armenian genocide. In a statement on April 24, the anniversary of the 1915 arrests of Armenian intellectuals and community leaders, President Biden praised the “strength and resilience” of the survivors and their descendants.
“They have never forgotten the tragic history that brought so many of their ancestors to our shores,” he said.
On his weekly podcast a few days later, Geragos said Biden’s move was more than a political symbol. He said it potentially opened the door for him to file new lawsuits against the Turkish government or banks.
“It’s an interesting place that we are going to be,” he said.
Questions about the insurance settlement money still linger. The French board and a handful of descendants took their frustrations to the State Bar. The agency suspended Boyajian from the practice of law in 2018 and he later resigned his license.
The State Bar filed disciplinary charges against Yeghiayan and made an unsuccessful attempt to disbar his wife. It took no action against Kabateck and Geragos, with a bar supervisor telling one alleged victim that “suspicion is not a basis for investigation.”
Shnorhokian, of the French board, has continued sending the State Bar and law enforcement agencies what he sees as evidence Geragos and Kabateck mishandled settlement funds.
“I simply want justice,” Shnorhokian said. “I will fight to the end.”
Yeghiayan did not get a chance to defend himself against the State Bar charges. The architect of the genocide cases died Sept. 29, 2017, at age 81.
In an interview posted on YouTube the year he died, Yeghiayan tried to rally the Armenian community to investigate the settlement.
“It’s a typical Armenian concept that we shouldn’t tell other people about our dirty laundry,” he said. “The more quicker we show our dirty laundry, the next generation, other people will not dare to try and steal money from Armenian organizations.”
Times special correspondent Astrig Agopian in Paris and Yerevan contributed to this report.