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Aeroflot Frauds Were Endless, Agency Says

LOS ANGELES (CN) - A Los Angeles travel agency claims it was defrauded and harassed because it refused to pay bribes to the Russian airline Aeroflot.

Riviera Travel & Tours says Aeroflot's U.S.-based officials turned the screws on it after it won exclusive West Coast wholesale rights to Aeroflot tickets.

Ironically, Russian executives at Aeroflot claimed they offered the deal to Riviera to weed out corruption, and "Riviera Travel was the only inspected agency having never bribed an Aeroflot agent or representative," according to the complaint.

Riviera Travel & Tours sued Andrey V. Novokshonov, Alexey M. Aleksandrov, and Joint Stock Company Aeroflot-Russian Airlines, in a 17-count, 48-page federal RICO complaint. Novokshonov is the general manager of Aeroflot USA, and Aleksandrov its regional manager in Los Angeles, according to the complaint. Both are citizens of Russia.

Riviera says it opened an office in Beverly Hills on Jan. 1, 2005, after "the final decision to award Riviera the exclusive West Coast contract," upon which "Aeroflot informed all other travel agencies on the West Coast of the elimination of all wholesale agreements between such agencies and Aeroflot."

But it didn't last.

The complaint states: "As soon as Riviera was granted exclusive wholesale contract with Aeroflot, unscrupulous Aeroflot USA representatives, including Aeroflot USA's general director Anatoly Deloveri ('Deloveri') made numerous illegal kickback and bribe elicitations. Riviera quelled such attempts by Deloveri and the other Aeroflot USA representatives.

"As Riviera's customers from the former Soviet Union, especially the American-Armenian customers from Hollywood and Glendale, became wealthier in time and more inclined to travel back to their native homelands, Riviera's sales volumes substantially increased. The approaches for illegal bribes by Aeroflot representatives intensified as Riviera's sales volumes increased."

In early 2007, the complaint states, "Deloveri approached Riviera with the illegal purpose of extorting bribes and kickbacks. Deloveri told Riviera's president Caren Tumanian 'the times have now changed' and asserted that in order for Riviera to keep its Aeroflot contract, Riviera would have to kick back a portion of sales profits directly to Deloveri for each ticket sold. Deloveri stated to Tumanian that 'Moscow didn't give you the contract for your beautiful eyes. Either Riviera gives us a kickback for each ticket sold, or we will take your contract from you.' When Riviera refused to yield to Deloveri's demands, Deloveri promised that Riviera will regret its decision."

Deloveri is not named as a defendant.

In this case, Riviera says, Deloveri was true to his word: It promptly lost its wholesale contract to an East Coast competitor and was forced out of the Beverly Hills office building it shared with Aeroflot. "The offices are currently occupied by Downtown Travel, subsidiary of Riviera's competitor from the East Coast, which now enjoys the exclusive rights Riviera once had and the customer base which took Riviera numerous years to painstakingly and scrupulously develop," the complaint states.

But that's not all, Riviera says. It claims that Deloveri "fraudulently and maliciously concealed from authorities in Moscow that Riviera had been prohibited from wholesaling," and continued to harass it when it refused to pay kickbacks or bribes.

Riviera says it also had to pay fraudulent "no show" refunds, when LAX Aeroflot officials prevented customers who actually showed up from boarding planes.

Riviera says it had to pay $120,000 in fraudulent no-show refunds from 2007 to 2010.


"One after another, Aeroflot representatives in the USA harassed Riviera," the complaint states. "Riviera's problems drastically worsened after the appointments of Andrey Skvortsov, Aeroflot's representative at LAX, Andrey V. Novokshonov, general director of Aeroflot USA, and Alexey M. Aleksandrov, regional manager of Aeroflot in Los Angeles."

Riviera claims Aeroflot extended its harassment to Riviera customers, harassing them at LAX and charging them hundreds of dollars in "cash fees" to board Aeroflot flights.

"For example, upon information and belief, on or about October 12, 2009, Riviera's customer Mr. Akopyan showed up at Aeroflot's counter at LAX and was told by Aeroflot's representatives that his ticket has not been issued. He was asked for $600.00 to be allowed to board the plane. Upon information and belief, Aeroflot falsely stated it is Riviera's fault and told the customer, 'Go get your $600.00 from Riviera.'"

Riviera says it had to pay Akopyan $625, though he had been given a valid ticket, and Aeroflot knew it.

Riviera says Skvortsov also blocked seats on flights to accommodate extra or undocumented cargo, and that when Moscow authorities wised up to this, Skvortsov blamed Riviera for overselling tickets.

"Skvortsov's misrepresentations were fraudulent and were deliberately made to tarnish Riviera's reputation in retaliation for Riviera's refusal to give kickbacks and bribes to Aeroflot USA's representatives," the complaint states.

Skvortsov is not named as a defendant.

But Riviera says: "From the moment of his appointment at on or about 2009, Andrey Skvortsov, Aeroflot's Representative at LAX persistently confronted Riviera for the purpose of eliciting illegal kickbacks and bribes.

"On one such incident, after Riviera rejected Skvortsov's bribery request, Skvortsov told Riviera's president Caren Tumanian she needs to understand that there is a big difference between the Aeroflot counter at LAX and the Aeroflot counter somewhere in the middle of Siberia, and people do not get positions in rich foreign countries unless those who appoint them there anticipate receiving kickbacks. Skvortsov stated that he required a kickback from Riviera because Skvortsov's superiors expected a kickback from him. He further stated, 'If you think we gonna let some American girl earn more money than us just tapping a keyboard and selling tickets of our Russian airline, you are mistaken. Do you think it's easy to make money off of Aeroflot if we do not get any kickbacks from you?'"

Riviera claims that Novokshonov and Aleksandrov subjected it to "a calculated scheme of harassment and extortion."

The complaint states: "In a well televised and publicized incident, in September of 2010, LAPD detectives arrested Alvard Davtyan, the owner of Yerevan Travel, for running a travel agency scam. Upon information and belief, in early 2010, Davtyan made numerous reservations with various travel agencies in Los Angeles for tickets set to fly during the summer's busy season. Davtyan collected cash from the customers but, instead of buying their tickets from the travel agencies, only made reservations.


"Davtyan acquired counterfeit credit cards with stolen information which were indistinguishable from the genuine originals. As flight dates approached in the summer of 2010, Davtyan began using counterfeit cards to purchase from travel agencies the tickets reserved for her customers months before. After Davtyan used the first batch of the counterfeit cards, the fraud was uncovered by the credit card companies. The travel agencies were required by credit companies to refund all charges made by Davtyan's Yerevan Travel. Davtyan's customers began showing up at the airport ready to fly but were prevented from boarding by airline representatives because the payments for tickets were charged back to credit card companies. The customers notified LAPD and Davtyan was arrested, charged with grand theft and convicted."

Riviera says it was one of many travel agencies victimized by Davtyan: "Riviera Travel sustained a loss of about $120,000 to various airlines because of Yerevan Travel's fraud."

But even that was not enough from its Russian extorters, Riviera says: "Fraudulently and maliciously, to further injure Riviera in the eyes of Moscow's authorities, and to obtain leverage in their unlawful attempts to make Riviera responsible for the blocked seats and fully authorized discounted tickets, Novokshonov and Aleksandrov, fraudulently concealed from Aeroflot authorities in Moscow Yerevan Travel's fraud, and blamed the fraudulent transactions of Riviera which was itself a victim of the same crime and ultimately bore all the financial losses."

Late in 2010, Aleksandrov visited Riviera's office and threatened to deprive it of its Aeroflot contract unless it sent emails to Aeroflot taking responsibility for the discounted tickets, the complaint states.

"On one such visit, Aleksandrov said 'Look. I know Skvortsov should've never claimed the discounted tickets were unauthorized, but it's too late now. Skvortsov has already told Moscow Riviera has issued unauthorized tickets and he is not going to take his words back. You have to understand, that Novokshonov has to now look good in the eyes of Moscow as Aeroflot USA's new General Director.' Aleksandrov further stated, "I'm going to help you. Write a couple of emails acknowledging that you received the debit memos and are willing to pay at a future date. Novokshonov will show the emails to Moscow to show he is doing a good job.' Aleksandrov stated that if Riviera complied, he and Novokshonov would arrange so that Riviera would never have to pay any amount in relation to debit memos. Aleksandrov then stated that if Riviera refused to send emails taking responsibility for the discounted tickets, he and Novokshonov would have no choice but to take away Riviera's contract.

"Under pressure from Novokshonov and Aleksandrov, plaintiff agreed to send the emails described in paragraph 72 [the previous paragraph]. In the presence of numerous Riviera employees, Aleksandrov on more than one occasion dictated the contents of the emails and required Riviera's president Tumanian to send the emails to Novokshonov.

"Upon information and belief, the defendants Novokshonov and Aleksandrov maliciously forced Riviera into sending the emails described in paragraph 72, for the ulterior purpose of causing the cancellation of Riviera's contract, in which they ultimately succeeded. In early December 2010, Riviera was informed by Aeroflot that its contract is terminated."

But even that did not end it, Riviera says. The day after Aeroflot terminated its contract, "Aleksandrov visited the Riviera office in Hollywood to bring 'a message from Novokshonov.' Aleksandrov stated that the termination of Riviera's contract is not final yet and Novokshonov can reverse it before it is finalized the next day. According to Aleksandrov, Novokshonov required $50,000 from Riviera in order to keep the Aeroflot-Riviera contract termination from being finalized. Riviera explained it was unable to pay that amount. Aleksandrov asked 'how much can you pay right now? 50,000? 40,000? If you do not provide at least $30,000 the finalization of your contract with Aeroflot is inevitable. You are going to lose your contract. You have two hours to make your decision.'

"In fear of completely losing its contractual rights with Aeroflot and a customer base which took Riviera years to establish, Riviera's president Tumanian wrote and gave Aleksandrov a check for the $30,000, which Aleksandrov immediately grabbed and left."

That didn't end it either, Riviera says. When it asked when it would get its contract back, in exchange for the $30,000 bribe, Aleksandrov told it, "We need time." A week later, Aleksandrov demanded another $70,000, calling it "a bond to allow reinstating the Aeroflot-Riviera contract," according to the complaint.

Finally, "On or about April 2011, Riviera, fed up with the extortion of $30,000 by Novokshonov and Aleksandrov and the continuous harassment of its customers at LAX, in a desperate attempt to notify Aeroflot authorities in Moscow of Aeroflot's USA representatives' unlawful conduct, initiated through ARC [the Airline Reporting Corporation] the refund of approximately 168 flown Aeroflot tickets totaling $138,097," the complaint states. "Although designed not as a fraud but simply to get the attention of Aeroflot officials in Moscow, Riviera's act of refunding flown tickets constituted a technical violation of the Agent Reporting Agreement ('ARA'), a written agreement among ARC and Riviera."

It adds: "Upon information and belief, for the purpose of obtaining monetary benefits from Aeroflot, Novokshonov deliberately concealed from Aeroflot authorities in Moscow the true circumstances behind the ARC incident involving $138,097 Riviera held to get the attention of Aeroflot, and instead, misrepresented to Moscow authorities that the monies were in danger and were successfully retrieved only because of his personal efforts."

Riviera compensatory damages of $3.4 million, and punitive damages for RICO conspiracy, tortious interference with contracts, tortious interference with prospective economic relations, trade libel, defamation, breach of faith and fair dealing, breach of agency, fraud, detrimental reliance, outrageous conduct, negligent retention and/or supervision, violation of California anti-bribery laws, unjust enrichment, equitable tracing, imposition of a constructive trust, injunctive relief, disgorgement of profits, and an accounting.

Riviera is represented by Sako Sirmabekian of Glendale.

Neither the attorney nor Aeroflot responded to requests for comment.

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