Attorney recommended for disbarment for taking money meant for Armenian genocide survivors

US Official News
 Saturday


Attorney recommended for disbarment for taking money meant for
Armenian genocide survivors


Sacramento: The State Bar of California, The State of California has
issued the following news release:

The State Bar Court of California has recommended that a Southern
California lawyer be disbarred for misappropriating $30,000 from a
trust fund for Armenian genocide survivors, using other trust money to
pay for her children’s law school and failing to properly report the
transactions to tax authorities.


A State Bar Court judge found that Rita Mahdessian, 58, [#141901] was
culpable for misappropriating funds from a trust she and her husband
were hired to administer, according to court documents.

Mahdessian and her husband, Vartkes Boghos Yeghiayan, 81, [#41773],
received notice of disciplinary charges on Aug. 18, 2016 for allegedly
misappropriating $385,000 meant for Armenian Genocide survivors.

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. 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.

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 Mahdessian’s daughter.
In one instance, Mahdessian created an account in her daughter's name
and then deposited $30,000 from one of the trusts. Mahdessian
justified the transfer by saying it was a repayment of a loan from her
daughter. But no such loan had ever been made. None of those funds
have yet to be returned to the trust. She used another fund’s monies
to pay for law school tuition for her children.

The State Bar Court found that Mahdessian had misled a judge, failed
to maintain funds in a trust account and committed moral turpitude.

The State Bar Court ordered that Mahdessian be placed on involuntary
inactive status.

The final decision on Mahdessian’s disbarment rests in the hands of
the California Supreme Court.

The case against Mahdessian’s husband stands in abatement because of illness.

A special deputy trial counsel was appointed to prosecute Mahdessian’s
attorney discipline case in accordance with rule 2201, which sets out
a process for the Chief Trial Counsel to recuse the office to avoid
actual or potential conflicts of interest.

The State Bar of California received more than 15,000 complaints in
2016. As a result of disciplinary actions taken by the State Bar of
California, nearly 200 attorneys were disbarred in 2016 and the Client
Security Fund paid out more than $8 million to victims of attorney
misconduct.

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