Tarverdyan filed for bankruptcy on July 29, 2015 and has attended two creditor meetings (also known as 341 hearings), the first on Sept. 2, 2015 and the second on Dec. 9, 2015. At each hearing, he was placed under oath and swore to truthfully answer the trustee's questions regarding his financial affairs. A trustee is the overseer and administrator of Chapter 7 bankruptcy cases tasked with identifying and liquidating a debtor's assets so that as much money as possible is returned to unsecured creditors.
Bloody Elbow attended the December 31 hearing and transcribed the
key elements of Tarverdyan's testimony, observing statements such as "I really didn't know," "I was really in shock," and "I didn't even understand." There were references to the September hearing, including to testimony that Tarverdyan had transferred the Glendale Fighting Club to someone other than his wife, Diana Avetisyan.
These references didn't make much sense at the time. News of Tarverdyan's bankruptcy didn't break until November, so we had no idea what was said in the prior hearing. We only knew what was in Tarverdyan's paperwork and what he said in the December hearing, namely that he didn't know what was going on, appeared to be placing blame on his original attorney for "significant errors" in his bankruptcy petition, was now saying his wife is the owner of GFC, and he talked about receiving approximately $200,000-300,000 to-date in 2015 from training Ronda Rousey.
We didn't know that this testimony was markedly different from what was offered three months earlier when Tarverdyan's bankruptcy filing wasn't yet public knowledge, and the trustee might not have known he trained one of the UFC's biggest stars.
We didn't know that in September, Tarverdyan testified, "No, not really," when asked if he had any source of income at all, and went on to say, "...sometimes I do personal trainings, like I get fifty bucks, forty bucks, but I wouldn't call it that much of an income." We didn't know he testified that while he used to own the Glendale Fighting Club (GFC), he "...couldn't make the payments and couldn't just run it..." so he let a student, Sevak Ohanjanyan, take it over "maybe five, six years ago." We also didn't know that, when asked if his wife owned any assets not listed in his bankruptcy schedules, Tarverdyan replied, "No, sir."
Bloody Elbow has obtained the audio recordings of both of Tarverdyan's 341 hearings. Readers can listen to the hearings in their entirety in the embedded video above. If there are any problems,
click here for the direct YouTube link. A complete transcription of testimony in both hearings can also be read below.
There appear to be many inconsistencies in Tarverdyan's testimony. For example:
- In September, when asked if he's ever received portions of a purse from fighters he's worked with, Tarverdyan replied, "No, not, not, nothing. Nothing but a few hundred dollars, that's it." In December, when asked to estimate how much he's received in 2015 from training Ronda Rousey, he answers, "It's in, it's in the, it's in the six-figure mark."
- In September, Tarverdyan testified that Sevak Ohanjanyan has taken over GFC for five or six years. In December, he says that his wife owns the gym.
- In September, Tarverdyan stated that he doesn't have keys to GFC. In December, he appears to call GFC "my gym."
- In September, Tarverdyan said he's never had any interest at all in a particular real estate property. Later in the same hearing, the trustee shows Tarverdyan a deed to the property with his signature on it.
Readers are encouraged to listen to the complete audio of both hearings or review the transcripts. There's a good chance the apparent inconsistencies above won't be the only statements to raise eyebrows.
So how serious is this situation?
Bloody Elbow asked attorneys Jason Cruz of
MMA Payout and
Cruz Law and Erik Magraken of
Combat Sports Law to share their legal perspectives on the apparent inconsistencies in Tarverdyan's September and December testimonies. Here's what they had to say.
Jason Cruz:
Having represented debtors at this kind of hearing, I advise clients not to make any bold assertions or speculate on any questions despite the fact most of the information asked about is in the debtor's paperwork. I also tell them not to lie or misrepresent information. While the purpose of the 341 hearing is for the debtor to talk to the trustees and any creditors that may appear, the attorney may correct information that might be omitted or knowingly not correct. It does not mean someone is lying under oath, but ensures that the record is accurate.
As for whether inconsistent testimony may hurt Tarverdyan's bankruptcy proceeding, it's hard to say. A bankruptcy trustee hears tons of stories of a debtor's financial misfortunes. Of course, Tarverdyan's stories leave the trustee to determine the veracity of his testimony. This will likely lead to a 2004 examination (named after the section in the Bankruptcy Code) for Tarverdyan, which is like a deposition and more formal than his 341 hearings.
If it is discovered that Tarverdyan lied, he could have his bankruptcy case dismissed and even be guilty of perjury (i.e., lying under oath).
Erik Magraken:
Not all inconsistencies in sworn testimony give rise to serious consequences such as allegations of fraud or perjury. Perjury prosecutions are fairly rare events and not all inconsistent or even contradictory statements lead to such a consequence. A fundamental question is whether there is any explanation that can reconcile sworn evidence which is seemingly inconsistent or contradictory on its face.
Generally the administration of justice is concerned that the underlying goals of its process are fulfilled. In the case of bankruptcy proceedings those goals are that assets are accurately disclosed so that creditors can be paid what they are rightfully owed.
It is always good legal strategy to be candid in sworn testimony and sworn legal filings. If a bankruptcy trustee is concerned that the sworn evidence is inaccurate and misleading then steeper legal consequences can be pursued. It's important to remember proof beyond a reasonable doubt is needed if allegations of perjury are contemplated.
Hopefully for this individual's sake and the sake of his creditors he is cooperating with the legal process and being candid in all of his sworn testimony.
