Attorneys who have won tens of millions of dollars for descendants of Armenian Genocide victims are accusing one another in court of misusing funds or stalling payments to thousands of their clients.
Mark Geragos and Brian Kabateck, two of the lead attorneys in class-action cases Armenian Americans have filed in federal court against insurers, accuse Glendale-based co-counsel Vartkes Yeghiayan and his wife, attorney Rita Mahdessian, of setting up sham charities and misusing nearly $1 million over the last six years.
Yeghiayan, in turn, is accusing Geragos and Kabateck of misusing proceeds from the litigation and of allowing compensation requests from more than 1,000 Armenians to go unanswered.
The imbroglio comes several years after New York Life Insurance Co. and French insurer Axa S.A. agreed to pay $37.5 million to settle claims that they failed to compensate descendants of genocide victims who bought policies between 1875 and 1923.
Other insurers and banks still face accusations that they profited unfairly from the estates of people who were killed or forced to flee during a pogrom by Ottoman Turks, including the violence from 1915 to 1923 that resulted in the death of 1.5 million Armenians.
The $20-million New York Life settlement from 2004 called for most of the money to go to families that could prove their losses, with $3 million to go to charities addressing the needs of the Armenian community. The 2005 Axa settlement for $17.5 million contained a similar provision, with $3 million to go to French charities.
In March, Geragos and Kabateck sued Yeghiayan, accusing him of creating two charities — the Center for Armenian Remembrance and the Paris-based Conservatoire de la Memoire Armenienne — and then failing to disclose his and Mahdessian’s roles in the organizations, to which a federal judge allocated nearly $1 million, according to the lawsuit.
Geragos and Kabateck allege an investigator they hired discovered the Paris office of the Conservatoire de la Memoire Armenienne doesn’t exist.
In U.S. District Court filings, they also allege that the Center for Armenian Remembrance, based in Yeghiayan’s Brand Boulevard law office, “appears to serve no legitimate purpose [and] has not engaged in any charitable purposes on behalf of the Armenian community.”
Yeghiayan and Mahdessian did not respond to requests for comment.
But Yeghiayan’s attorney, Roman Silberfeld, refuted the accusations.
“I am reasonably well satisfied that the allegations made are false, that nothing improper has happened with regard to Mr. Yeghiayan,” Silberfeld said.
Yeghiayan had made his own claims of misconduct against Geragos and Kabateck, arguing in court documents that they went to Europe in 2010 and improperly met with the Axa Settlement Board, a group of three people that writes the claim settlement checks for the thousands of Armenian plaintiffs.
He also alleged that the administrator of the Axa funds intentionally stopped responding to inquiries from claimants.
Since February 2010, Yeghiayan claimed in court filings that his office fielded more than 1,000 complaints and more continue to pour in “regarding the administration of the trust account and the baseless denial of claims.”
In their response filed in court, Geragos and Kabateck denied any wrongdoing. Neither could be reached for comment.
Yeghiayan is also claiming that Geragos and Kabateck have failed to turn over documents for a full accounting of the use of the Axa funds for the last five years. Last month, U.S. District Court Judge Christina Snyder ordered Geragos and Kabateck to provide the records.
On May 6, the warring parties agreed to mediate their dispute before retired state appellate court Justice Howard Wiener.
Silberfeld said he believes that the conflict arose from the complexity of administering the settlement funds, and that it can be resolved “if all the cards are laid on the table, face up, by everyone.”
The attorneys, Silberfeld added, “turned the aggression they ought to be turning on the bad guys onto one another. That’s what I hope to be able to diffuse and solve in the next 60 days or so.”