18.05.2020 | Based on the appeal of the Prosecutor's Office, the case law of the RA Court of Cassation opens up new perspectives for the effectiveness of the investigation of money laundering cases

The RA Prosecutor General's Office received the decision of the RA Court of Cassation of November 7, 2019 (EKD/0161/01/15) on the basis of the appeal of the Deputy Prosecutor General of the RA in the criminal case initiated under Article 205, Part 2 of the RA Criminal Code.


The legal attitudes expressed in this decision laid also in the basis of the appeal submitted by the RA Prosecutor's Office, are case laws and can have a guiding role to improve the effective fight against money laundering as in transnational and national levels and also to give criminal and legal precise qualifications to the cases currently being investigated and having wide public resonance also in view of forming one common practice for ensuring the inevitability of punishment.


In particular, in the criminal case initiated in 2013 under Article 205, Part 2 of the RA Criminal Code, H. Gevorgyan is charged under Article 38-189, Part 3 of the RA Criminal Code (Complicity in False Entrepreneurial Activity), Article 190, Part 3, Point 1 (Money laundering in particularly large amount) and Article 205, Part 2 of the Criminal Code of the Republic of Armenia (Evasion from taxes), and H. Chanakhchyan is charged under Article 189, Part 3 and Article 38-190, Part 3, Point 1 of the RA Criminal Code.


According to the verdict of December 25, 2017 the Court of First Instance H. Gevorgyan was found guilty for money laundering in particularly large amount and H. Chanakhchyan was found not guilty for the charges of complicity and was acquitted. According to the same verdict they were sentenced to imprisonment for the other committed crimes.


An appeal was filed by the prosecutor regarding the acquittal, which, however, was rejected. According to the Court of First Instance and the Court of Appeals the evidence had not substantiated and proved that the defendants had legalized particularly large amount of money obtained illegally.


The RA Deputy Prosecutor General filed an appeal in cassation against the decision of the Court of Appeals to partially overturn the decisions of the lower courts regarding the acquittal and sent the case to the Court of First Instance for a new examination.


The Prosecutor's office expressed its position in the appeal that the lower courts misinterpreted Article 190 of the RA Criminal Code, and the evidence obtained in the case show that in the result of criminal activity – false entrepreneurial activity and evasion of taxes illegal financial means were obtained, which were involved in the assets of a company and mixed with other means creating the illusion of legal entrepreneurial activity were transferred to another non-commercial organization established for a criminal purpose, after which they were cashed and returned to the transferor. This criminal scheme cannot be described otherwise than legalization of property acquired through criminal means.


In the result of the investigation the RA Court of Cassation agreeing with this position of the Prosecutor's Office, fully satisfied the appeal, the RA had developed the positions expressed in the decision EKD/0090/01/09 of 24 February 2011 and increased the meaning and the essence of the crime of the concept "money laundering".


In the result of commenting on the criminal nature of the proceeds received criminally envisaged by Article 190 of the Criminal Code the RA Court of Cassation stated that by means of committing the mentioned crime the criminal has intention to legitimate the illegal property and incomes received in order to disguise the illegal and criminal sources and criminal traces. That is to say, by committing this crime, by committing money laundering operations the criminal intends to give them a legal look and get rid of criminal liability. Hence, when describing person's act as a legalization of proceeds of crime, one should pay comprehensive attention to the chain of actions, the illegal circulation of civil property and income which can generally show the criminal's intention to money laundry. Besides, according to the RA Court of Cassation, it is necessary to pay attention to the fact which legal proceeds concretely were legalized in the result of legal civil transaction and second how the legalization of property and proceeds are interrelated with the intention of "money laundry".