An accounting firm will review 178 insurance claims as part of a deal struck in a case involving a multimillion-dollar compensation fund for descendants of Armenian Genocide victims, attorneys announced Monday.
Lawyers Mark Geragos and Roman Silberfeld, who sit on opposing sides of a dispute regarding the fund, said claims for $10,000 or more will be examined to make sure there were no accounting discrepancies.
Originally, Silberfeld's client, Glendale-based attorney Vartkes Yeghiayan, had sought an audit of all 1,300 claims made to a compensation fund set up by France-based insurer Axa S.A. to check for problems.
Accounting issues had previously been raised, including the assertion that some claimants who received multiple checks only cashed those for smaller amounts, even though checks for larger amounts were supposedly sent out at the same time.
Also, in some instances, separate but identical claims were filed by siblings. One sibling's claim would be approved, but the claim from the other sibling would be denied.
Audit costs will come out of the $2.5 million left in a $17.5-million compensation fund set up by Axa several years ago.
The attorneys also agreed that all claims will be moved to a neutral location.
"That way everyone will have access to them," Silberfeld said.
The claims are currently stored in the basement of a building owned by Geragos.
It was also discovered a few months ago that the multiplier used to determine payment amounts was off by 0.1%.
Silberfeld and Geragos agreed that the correct multiplier will be used on claims for $10,000 or more.
Claimants paid $10,000 will receive about $10 each, which is economically feasible, Silberfeld said. Paying the additional amount on claims under $10,000 would not be worth the time and postage, he added.
The fund's administrator, Glendale resident Persagh Kartalian, will submit a sworn statement to the court providing details about the fund's distribution, staff and operations, Silberfeld said.
Judge Christine Snyder said Kartalian's input is important. "He does owe everyone here some explanation about what happened," she said.
Yeghiayan's motion is tied to a lawsuit filed earlier this year by Geragos and attorney Brian Kabateck against Yeghiayan alleging that he and his wife, attorney Rita Mahdessian, set up sham charities and misused nearly $1 million during the last six years.
Geragos, Yeghiayan and Kabateck were on the same legal team that in 2005 brought a lawsuit that resulted in Axa's compensation fund, which was set up to pay claims that it failed to compensate descendants of Armenian Genocide victims who bought policies between 1875 and 1923.