For sale: a French chateau-style mansion in one of Los Angeles’ most exclusive neighborhoods, Holmby Hills, with 11 bedrooms, 27 bathrooms and an asking price of $63.5 million.
At 33,652 square feet, it’s among the largest homes on the Southern California market, but there are a few issues. For one thing, the interior isn’t finished yet. And, this week, federal prosecutors in Los Angeles decided to seize the estate, alleging it was the result of corruption involving a powerful Armenian politician and his children.
The US Department of Justice explained in a court filing how the South Mapleton Drive property – a short walk from the Playboy Mansion – was bought in 2011 for $14.4 million with kickbacks from the family of Gagik Khachatryan, the former Armenian finance minister, is a prominent businessman there.
Khachatryan, 66, his two sons and the businessman all face criminal charges in Armenia; the businessman is accused of having paid more than 20 million dollars in bribes. A lawyer representing WRH Inc., the company that owns the home, did not respond to a message seeking comment.
The Holmby Hills property went on the market on April 7, with real estate agency Hilton & Hyland announcing its “immaculate architecture, manicured landscaping and your chance to fully customize the interiors”.
Listing agent, Richard Maslan of Hilton & Hyland, told The Times that a potential buyer will be able to finish the house in any style they choose. He claimed he was still looking for a buyer.
“The FBI told me I could keep doing screenings,” Maslan said. “If we get an offer and the seller and the Department of Justice agree on a sale price, we can still sell it.”
The residency saga begins in 2008, when Khachatryan took over as head of the State Revenue Committee, the government agency that assesses and collects taxes in Armenia. After that post, he served for two years as the country’s finance minister, but continued to oversee tax duties, earning him a reputation as a “super minister”, prosecutors said.
To gain favorable tax treatment, businessman Sedrak Arustamyan allegedly entered into two fictitious loan agreements with Khachatryan’s adult sons – the first loan in 2009 for $7 million and another in 2011 for $13.4 million. millions of dollars. Both loans carried agreements specifying the payment due date and interest terms, but according to court filings, Arustamyan never received interest or principal on either. “assumed loans”.
To use these alleged loans, Khachatryan and his sons formed several entities “to receive, disguise and conceal illegal bribe payments” along with their purchase of the Holmby Hills property. More than $13 million was wired by Arustamyan directly to West Coast Escrow’s Comerica Bank account, but days before the sale closed, he claimed he would not own the title and waived any claims on the money, according to court filings.
Shortly after buying the house – which was previously owned by Lions Gate Entertainment executive Jon Feltheimer – the family razed the property and hired Richard Landry, a mega-mansion architect who has built trophies for celebrities such as Mark Wahlberg, Tom Brady and Wayne Gretzky.
Khachatryan’s sons told Landry’s design team that they wanted their children to attend school in Los Angeles and asked the team to envision the house as their family’s residence, the documents show. filed by the court.
Plans called for an elaborate compound, including bedrooms for Khachatryan, his two sons and daughter, as well as servants’ quarters, a wine cellar and a two-story library, according to court documents.
Construction began in 2015, and although the house’s Franco-Norman exterior has been completed, along with the gardens, swimming pool and spa, the interior is incomplete.
In 2016, when Khachatryan left office, the alleged corruption scheme was exposed and authorities uncovered millions of dollars in unpaid taxes owed by Arsutamyan’s companies, prosecutors say. In 2019, Khachatryan was charged with abuse of power and embezzlement. His sons and Arusatamyan were charged in 2020. The sons, Gurgen and Artyon, have since fled Armenia, according to court documents.