Troy’s standard manufacture at the center of a family feud

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TROY — Rensselaer County businessman Daren Arakelian may be out of jail, but a new legal battle with his three siblings is just beginning.

Arakelian, 54 – convicted of wire fraud in 2020 for selling Chinese-made supplies to the federal government under the false claim that they were made in America – is being sued by his sister and two brothers for his actions involving family. longtime company, Standard Manufacturing in Lansingburgh, and allegations that he funneled millions of dollars to himself through “alter ego” companies.

In a lawsuit filed in Rensselaer County State Supreme Court this week, Alison, Christian and David Arakelian also accuse Daren Arakelian of trying to exert control over their elderly father, George Arakelian, in an effort to to turn it against them. The lawsuit said Daren Arakelian engaged in wrongful misappropriation of confidential information, unfair competition, fraudulent conduct and misappropriation of business opportunities.

Daniel M. Sleasman, the plaintiffs’ attorney (which also includes 750 Second Avenue Realty, a limited liability company named after the company’s longtime location at 750 Second Ave.), told The Times Union that the lawsuit had been filed but not yet served. He declined to comment further. Daren Arakelian could not be reached for comment.

Standard Manufacturing, the Arakelian family’s clothing and jacket manufacturing business since 1924 in Collar City, once employed more than 1,000 workers at multiple sites. The 750 Second Ave. location, which closed in March 2020, was slated for 151 affordable home units. The company was 90% owned by George Arakelian and his now deceased sister, Dorothy Arakelian King, who died in August 2020.

The four Arakelian siblings had a minority share. Between 2007 and 2020, the company compensated Daren Arakelian for roles in general management, marketing and sales. Daren Arakalian’s wife, Tracy Arakelian, became the executor of King’s estate, the lawsuit says. He said the couple had become de facto directors of Standard Manufacturing.

The siblings allege that Daren Arakelian set up alter ego companies, including “Great 4 Image”, to compete with the family business.

His ownership of another alleged alter ego company, “SI Textiles and Clothing,” was kept secret from the siblings and listed as a seller, according to the lawsuit. The siblings allege that the company’s supposed parent company, “Standard Issue”, was misrepresented as an independent manufacturer in Texas and a supplier to the family business.

But it was a “pretext and part of Daren Arakelian’s secret and fraudulent scheme to embezzle the revenues and profits of Standard Manufacturing,” the lawsuit said, adding “…at no time did a garment manufacturer, had manufacturing facilities in Texas, and as an alter ego of Daren Arakelian, was not Standard Manufacturing’s independent third-party product supplier.”

The supposed manufacturer’s location was in a Dallas strip mall. It did not manufacture clothes and had no manufacturing facilities. But that didn’t stop Arakelian, in his role as Standard Manufacturer’s “buying agent,” from sending more than $3.5 million to the alleged seller between September 2009 and February 2020, according to the lawsuit.

The family business demanded an account of tax returns and profits earned by Daren Arakelian, but this was not done, the lawsuit says, calling his alleged behavior a “fraudulent and unauthorized dealing that significantly damaged Standard Manufacturing”.

The siblings claim that in May 2022, Daren and Tracy Arakelian ordered that a “sham litigation” be filed in a bad faith attempt to interfere with the transfer of the Standard Manufacturing building to a third party.

And the lawsuit states that Daren and Tracy Arakelian exercised “undue influence over George Arakelian for the purpose of fomenting false legal proceedings against the plaintiffs and generally cultivating a severely adversarial and hostile relationship between George Arakelian and the plaintiffs, including her three other children. He said the May litigation falsely claimed that Standard Manufacturing was evicted in March 2020 when it voluntarily shut down its interests in the property.

Standard Manufacturing and the so-called alter ego companies were also named as defendants.

One of them, Great 4 Image, was at the heart of Arakelian’s wire fraud, which landed him a three-month prison sentence last year. Arakelian tricked federal agencies into believing its products — made in China — were made in New York, California and Georgia. It was a violation of the Buy America Act. He paid over $702,000 in civil costs.

Thirty letters of support were sent to Chief U.S. District Judge Glenn Suddaby before he imposed Arakelian’s sentence, including letters from his wife, sons, George Arakelian and King. None were of the three siblings.

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