Armenia Says Developer's Firm Dodged Taxes

The government of Armenia is claiming that a telecommunications company controlled by Orange County developer Barry Hon skipped out on paying $18 million in taxes and penalties before ceasing operations in that country last year. An Armenian court earlier this week cleared the way for the government to seize $18 million worth of stock in the Armenian telephone company Armentel, which was once co-owned by Trans-World Telcom Ltd., an offshore company that the government claims is run by Hon. The dispute began last year after Trans-World sold its 49% stake in Armentel to a Greek-owned company called Hellenic Telecommunications Organization for an estimated $55 million. Trans-World acquired the stake in 1994, according to Harold P. Reichwald, the Los Angeles attorney representing the Armenian government.

In a lawsuit filed June 25, the Armenian tax ministry claimed that Trans-World and Hellenic Telecommunications failed to pay $8 million in capital gains taxes due after the sale and owe an additional $10 million in penalties and back taxes. Van Krikorian, a New York attorney for Trans-World, denied that the company owes the taxes, saying Hellenic Telecommunications agreed to pay the taxes as part of the sale agreement. Krikorian also denied that Hon controlled Trans-World, saying Hon was not an officer or director of the company and did not receive any of the profits. Hon did not return phone calls Thursday.

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