AKHTALA, Armenia -- Before the arrival of Serop Der-Boghossian, this unassuming town in northern Armenia was marked by poverty and widespread unemployment.
But since the arrest last week of Der-Boghossian, the town's main benefactor, Akhtala has instead become synonymous with scandal.
Der-Boghossian, an Iraqi-born Armenian who spent decades working in the United States before returning to his ethnic homeland, has been formally charged with sex crimes. The arrest followed media reports accusing the 68-year-old businessman of pedophilia.
In particular, an article in the Yerevan-based investigative newspaper "Hetq" cited two young Armenian men who claimed to have had sexual relations with Der-Boghossian while still minors, and said they had video evidence to prove it.
Speaking to RFE/RL before his arrest, Der-Boghossian, the owner of a profitable Akhtala metals mine and a close adviser to Armenian Prime Minister Tigran Sarkisian, dismissed the media allegations as blackmail and attempt by his rivals to discredit him.
"There has been no such thing. I can say that in Akhtala there are people who are jealous of me and who would want to damage my reputation and harm my business. But there is no family, no person here whom I haven’t helped," Der-Boghossian said. Town's Benefactor
In fact, this town of 2,500 owes its livelihood almost entirely to Der-Boghossian, who more than a decade ago became Ahktala's main employer when he assumed control of the Metal Prince mining company.
But Der-Boghossian's claims have failed to deter prosecutors, who have made the case a priority. They have also called for authorities in Yerevan to take the case over from local officials.
While Armenia's National Security Service has stopped short of charging Der-Boghossian specifically with child molestation -- leveling only more general charges of sexual coercion -- the Prosecutor-General's Office has released a statement alleging the businessman engaged in homosexual sex with Akhtala teenagers in 2009 and 2010 in return for cash and other "material assistance."
For many years I worked as head of his security service. This is just the talk of evil people.
A Yerevan court on February 12 approved a security service petition to hold Der-Boghossian in custody pending his investigation and trial.
The scandal has sent shivers of discomfort through this deeply traditional Christian country, where issues like children's rights and pedophilia are rarely discussed. The issue came to the fore in Armenia last summer when a teacher at a boarding school for special-needs children was convicted of having sex with his underage female pupils.
But that case, and any pending prosecution of Der-Boghossian, is likely to underscore Armenia's notoriously light sentencing on child molestation. According to current law, sex crimes against children under the age of 16 are punishable by fines or prison sentences of up to two years. But senior prosecutor Artur Ghambarian, who has called for stiffer sentencing, said of 18 people convicted on child-molestation charges in 2009, only three were sent to jail.
"Every Armenian must realize that if they approach a child with other [illicit] purposes, they will face irreversible consequences. This must be a state policy," Ghambarian said.
The government has scrambled to sever its ties with Der-Boghossian, who as late as January 31 was listed on national websites as an adviser to Prime Minister Sarkisian, a post he had held since 2009.
Sarkisian himself has expressed concern over the scandal, writing on his blog after the publication of the newspaper allegations that he had "no words" to express his feelings and promising a "speedy, comprehensive, and transparent" investigation.
But officials in Akhtala have acknowledged that rumors of Der-Boghossian's sexual liaisons with underage men have circulated for years.
Vazgen Khachikian, the former head of Armenia's Social Welfare Service, is an Akhtala native and the brother of the town's current mayor. Khachikian, who was dismissed from his post last year by Sarkisian for reported mismanagement of a pensions scheme, says top government officials had been warned as early as a year ago about the businessman's alleged behavior.
Khachikian claims to have personally viewed video footage of Der-Boghossian engaging in sexual acts with two underage boys, and had attempted to sound the alarm. But he says law-enforcement officials had been reluctant to act, despite what he described as persistent evidence that something was amiss.
"Law-enforcement officials know that for many months, Serop would take children on trips to Yerevan and [the Armenian resort town of] Tsaghkadzor, for days or even weeks. And here’s the question: Why would a 13- or 14-year-old go with him to Tsaghkadzor or Yerevan?" Khachikian said.
Der-Boghossian, who had amassed a fortune in the millions of dollars, enjoyed a reputation in Akhtala as a philanthropist, providing shelters for disadvantaged youths and often presenting them with generous gifts.
Gagik Hakhinian, the coach of a local soccer team supported by Der-Boghossian, said he had never seen or heard anything inappropriate about the mine-owner's behavior.
“There were children, five or six people, who studied in Yerevan and had no place to stay there. So he rented a home for them and told them they could live there while they were studying. I've never noticed anything that would suggest this is a man capable of bad things," Hakhinian said.
"They say there's some video footage, and I'd like to know what kind of video this is. If it just shows him kissing someone -- well, we've all exchanged kisses on the cheek with Serop when we meet on the street, even Mr. Khachikian. It doesn't mean a thing. This could be a completely meaningless video that someone is just making a lot of noise about."
Changing Political Fortunes
But some authorities, like the city's former mayor, Suren Tamazian, told RFE/RL that Der-Boghossian had raised suspicions when he repeatedly failed to pay taxes to the city budget but continued to demonstrate considerable largesse with young men in the town.
Artur Sakunts, a prominent rights campaigner in the neighboring town of Vanadzor, acknowledges that rumors about Der-Boghossian have been circulating for years, and that the recent arrest was more likely to have been motivated by a shift in Der-Boghossian's political fortunes rather than the emergence of any new evidence.
He says criminal behavior can go unpunished for years in Armenia if the perpetrator is, like Der-Boghossian, a man of wealth and influence.
"I must say that this is the model in our country -- a person who has monopoly control over a small town and can dictate life there absolutely unchecked. He can allow himself to indulge in all sorts of things, including pedophilia," Sakunts said.
Child-rights activists in Yerevan say they have evidence to suggest that Akhtala residents are well aware of Der-Boghossian's sexual crimes, but kept quiet out of a mixture of fear and unwillingness to put the town's economic health at risk.
None of Der-Boghossian's alleged victims has come forward to discuss the charges. And most local residents, like these two men who did not want to give their names, say they have no reason to suspect the mine owner of criminal behavior.
"This person has been operating the mine and letting people earn a living. I can't say anything else," one man said.
"I haven't heard about any such thing. For many years I worked as head of his security service. This is just the talk of evil people. I quit the job with him, but it was on my own initiative," the other man said.
But others, like this woman who also didn't want to give her name, appeared to have their doubts.
"What's so good about him? Everybody knows that he would help minors, underage children -- but only boys. I don't know why only boys. He would give them money. Only boys, not girls. There are some of those boys in my neighborhood. But I won't show them to you. Why would I do that?"reported from Armenia by RFE/RL Armenian Service correspondents Hovannes Shoghikian, Hasmik Smbatian, and Ruzanna Stepanian