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Attorneys face disbarment charges for taking money meant for Armenian genocide survivors

Glendale attorney Vartkes Boghos Yeghiayan, 80, (bar #41773) and his wife, attorney Rita Mahdessian, 57, (bar #141901) are facing disbarment charges in State Bar Court for deliberately misappropriating $385,000 reserved for Armenian Genocide survivors and charitable organizations that help the Armenian community.

According to court documents, in 2005, Yeghiayan and Mahdessian received in trust a $20 million settlement in a class-action lawsuit against New York Life Insurance Co. (NYLIC) and AXA, S.A. on behalf of heirs and descendants of persons killed during the Armenian Genocide of 1915-1918.

Shortly after, Yeghiayan and Mahdessian created two nonprofit corporations – the Center for Armenian Remembrance (CAR) and Conservatoire de la Memorie Armenienne (CMA). Articles of Incorporation for both nonprofits list the Glendale business address of the couple’s law firm, Yeghiayan & Associates.

In 2007, Yeghiayan misrepresented to the district court that the two charities were qualified to receive settlement funds. Based on Yeghiayan’s representations, the court issued an order authorizing transfer of $200,000 to CAR.

Over several years, multiple questionable transactions took place in both CAR and CMA bank accounts. Court documents trace check deposits from the settlement fund to the couple’s nonprofits and their law firm. Records also reveal other unauthorized payments and transfers, including repayment of loans, payments to Loyola Law School and transfers to Yeghiayan’s daughter.

By misleading the judge and deliberately misappropriating funds, the attorneys committed multiple acts involving moral turpitude, dishonesty and corruption, the charges state.

The State Bar of California’s Office of Chief Trial Counsel handles complaints about the professional misconduct of attorneys and those posing as attorneys. The office received more than 40,000 calls in 2016. As a result, nearly 200 attorneys were disbarred in 2016 and the Client Security Fund paid out more than $8 million to victims of attorney misconduct.