Financial Fraud Thrives in Armenia: From Human Trafficking to Cyber Crimes

Investigative journalist Soghom Kteyan explores the expanding financial fraud landscape in Armenia, a small nation between Europe and Asia. Despite efforts to combat human trafficking, economic deceit is on the rise.

Human Trafficking and Exploitation

Armenia functions as both a source and destination for human trafficking:

• Exploitation of women and children: Sex trafficking, forced labor, and begging are prevalent issues.
• Victims’ unwillingness to report: The illicit labor market makes assessment challenging.
• Targeted demographics: Ukrainian, Belarusian, Russian women and Indian, Iranian men are often targeted.

Illicit Adoption Schemes

Corrupt officials and institutions facilitate illicit adoption schemes, leading to:

• Profitability: Most gains remain within Armenia due to local demand.
• Officials involved: Police officers, doctors, and orphanages are implicated.

Illicit Markets and Trade

Arms Trafficking

• Limited market: Nagorno-Karabakh region’s circulation of illegal weapons.
• Unknown scale: Allegations of international arms trade through Georgia fuel the illicit trade.
• Role of Russia: Arms exports to Armenia before and during conflicts contribute to the illicit arsenal.

Counterfeit Goods

• Thriving market: Luxury and branded goods are commonly counterfeited, with Armenia the third-largest provider of counterfeit cigarettes to Russia.
• Declining share: Belarusian cigarettes are increasing, cutting into the market size.

Natural Resources

• Illegal mining, logging, and firewood exploitation: Scarce resources are at risk.
• Endangered animals: Poaching for endangered animals like giraffes, zebras, and crocodiles drives illicit animal trafficking.

Gold and Diamonds

• Decrease in exploitation: Azerbaijan now controls most gold mines, and tighter border regulations and decreased demand have affected diamond smuggling.

Cybercrimes

• Rising incidents: Government and private entities are targeted by hacker groups.
• Politically motivated attacks: Most common between Armenia and Azerbaijan.
• Russian groups: Aim to penetrate Armenian governmental and military organizations.
• Value and entities involved: Undisclosed.

Transnational Drug Trade

Heroin

• Transit country: Northern Balkan smuggling route links Afghanistan, Iran, the Caucasus, and Europe.
• Domestic consumption: Minimal due to low purchasing power.
• Organized groups: Armenian, Russian, and Iranian actors dominate the market.

Cannabis

• Indoor facilities: Cannabis production thrives across the country.
• Synthetic drugs: Production and smuggling are also prevalent.
• Georgian and Iranian actors: Involved in the illicit cannabis and synthetic drug industries.

Government-Backed Cyber-attacks and Emerging Concerns

• Armenia-Azerbaijan conflicts: Government-backed cyber-attacks escalate.
• Ransomware attacks: A growing concern for law enforcement agencies.
• Cryptocurrency mining: Another emerging concern in the cybercrime landscape.