Armenian Bar should investigate genocide fund dispute, lawyer says

Two prominent Armenian-American attorneys pushed back Monday against reports they may have misused funds from a $17.5 million settlement related to the Armenian Genocide.

Mark J. Geragos addressed recent reporting in the Los Angeles Times that millions from French Insurer AXA failed to make it to people whose relatives were killed during the genocide in the Ottoman Empire during World War I. Geragos said recent news stories suggesting he and fellow Armenian-American attorney Brian S. Kabateck misappropriated funds displayed a misunderstanding of decade-old court proceedings.

Hillary Manning, a spokesperson for The Times, said the newspaper "stands behind our reporting. Our published investigation is the result of reviewing decades of court filings in various jurisdictions and going to court to obtain access to hundreds of pages of sealed court records.

Geragos, with Geragos & Geragos APC in Los Angeles, said there was money misappropriated from the fund -- many years ago by their co-counsel in the case. He and Kabateck sued them and recovered the money, Geragos said.

"I not only participated in the depositions, I got the money back, we put that in a court order and disclosed it to the court," Geragos said when reached Monday. "We did that work."

Kabateck, meanwhile, offered "an open invitation to the Armenian Bar Association to conduct a thorough investigation into Kabateck LLP's handling of the landmark AXA settlement," according to an email from his office.

On March 23, The Times reported money from the settlement went to a "sham claimant" or to recipients whose identities could not be identified, according to court documents and other records. The story also reported a French nonprofit that was to have distributed funds was never established, and that $1 million was donated to Loyola Law School, where both Geragos and Kabateck earned their law degrees.

On Saturday, the Los Angeles Times published comments from four prominent California Democratic politicians calling for an investigation into the allegations. These include Representatives Jackie Speier and Anna Eshoo, whose family members were killed in the genocide that began in Turkey in 1915, and Adam Schiff, who represents a heavily Armenian district centered on Glendale and Burbank.

The fourth politician quoted was state Sen. Anthony Portantino, D-La Cañada Flintridge, whose district overlaps with Schiff's. His office confirmed it was contacted directly by The Times and said the four did not issue a joint statement.

Speier's office also said she provided a statement when contacted by the Times.

"I am deeply concerned and outraged by the issues raised by the LA Times," Portantino said in a statement. "The Armenian Genocide was a horrendous historical atrocity and descendants of those murdered should not be victimized or be denied their rightful settlements. I support continued investigation and transparency until the rightful recipients are justly compensated and any and all actions of potential wrongdoing are exposed and properly dealt with."

"It is with profound sadness and concern that we learn of the allegations of malfeasance against several Armenian-American attorneys and their involvement in the improper distribution of legal settlements in the names of victims of the Armenian Genocide. ... If true, these allegations not only violate the ethical aspirations of the Armenian Bar Association's membership, but they represent a grave breach of our organization's core values," wrote the Los Angeles-based Armenian Bar Association in a statement posted March 29.

In 2005, Geragos, Kabateck and other attorneys reached a $17.5 million settlement with French insurer AXA S.A. The case alleged the company failed to pay survivors for life insurance policies held by victims of the genocide. In 2011, Geragos and Kabateck sued co-counsel Vartkes B. Yeghiayan and Rita Mahdessian for allegedly improperly taking $1 million from this fund. Yeghiayan died in 2017; Mahdessian was his wife. Geragos v. Yeghiayan, BC457091 (L.A. Super. Ct., filed March 11, 2011).

But Geragos also said another attorney, Berj Boyajian, was involved in misusing funds. Neither Mahdessian nor Boyajian responded to emails seeking comment. Mahdessian did not respond to a phone message. Efforts to reach Boyajian by phone were unsuccessful.

Mahdessian has been suspended by the California State Bar on four occasions, including in 2011, around the time of the dispute over funds. A 2018 bar document stated she had been charged with "misappropriating in excess of $385,000 in cy près settlement funds awarded to a California nonprofit corporation established for the education and remembrance of the Armenian Genocide."

Boyajian resigned last year with "charges pending," according to the bar's website. Neither Geragos nor Kabateck has faced bar discipline, according to the State Bar's website.

Geragos and his firm provided extensive documentation they said backs up their version of the story. These include a 2011 letter from Kabateck Brown Kellner LLP to the California Department of Justice detailing "a scheme by Mr. Yeghiayan and his cohorts have perpetrated to launder nearly $1 million from class action settlement funds."

"I have always been troubled and saddened by the deplorable actions of the criminals who conspired to steal money from the Armenian community and the rightful heirs of those who perished during the Genocide," wrote Kabateck in his statement on Monday.