Lawsuit lays out feud within Troy family
Daren Arakelian sued by siblings in dispute over apparel business
TROY — Rensselaer County businessman Daren Arakelian may be out of jail, but a new legal battle with his three siblings is just getting started.
The 54-year-old Arakelian — convicted of wire fraud in 2020 for selling Chinese-manufactured 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 the family’s longtime business, Standard Manufacturing in Lansingburgh, and allegations he funneled millions of dollars from it to himself through “alter ego” companies.
In a lawsuit filed in state Supreme Court in Rensselaer County 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 turn him against them. The suit said Daren Arakelian
engaged in wrongful misappropriation of confidential information, wrongful competition, fraudulent conduct and misappropriation of business opportunities.
Daniel M. Sleasman, the attorney for the plaintiffs — which also include 750 Second Avenue Realty, a limited liability company named after the longtime location of the business at 750 Second Ave. — told the Times Union that the suit was filed but not yet served. He declined further comment. Standard Manufacturing, the
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Arakelian family’s apparel and jacket-making business since 1924 in the Collar City, once employed more than 1,000 workers at multiple locations. The 750 Second Ave. location, which closed in March 2020, has been slated for 151 affordable housing units.
Peter Pastore, an attorney for Daren Arakelian, told the Times Union he believed the siblings filed the “completely meritless” lawsuit as retaliation for his client’s efforts to get his equal share from the roughly $3 million sale of the Standard Manufacturing building to a development company.
Pastore said Daren Arakelian retained him to get the equal share.
“Daren hasn’t had any involvement with most of the facts in that complaint in 12 years,” he said. “It’s completely stale.”
Standard Manufacturing had been 90 percent owned by George Arakelian and his late sister, Dorothy Arakelian King, who died in August 2020. The lawsuit said that Arakelian was fired from Standard Manufacturing in 2010 — then said he and his wife were effectively running it years later.
All four Arakelian siblings had a minority share. Between 2007 and 2020, the company compensated Daren Arakelian for roles in executive management, marketing and sales. Daren Arakalian’s wife, Tracy Arakelian, became the executor of King ’s estate, the lawsuit states. It said the couple became the de facto directors of Standard Manufacturing.
The siblings allege Daren Arakelian set up alter ego companies, including “Great 4 Image,” to compete with the family’s business.
His ownership of another
alleged alter ego company, “S.I. Textiles and Clothing,” was kept secret from the siblings and listed as a vendor, according to the lawsuit. The siblings allege the outfit’s supposed parent company, “Standard Issue,” was falsely made to appear as an independently owned manufacturer in Texas and vendor to the family business.
But it was a “pretext and part of Daren Arakelian’s secret and fraudulent scheme to misappropriate revenues and profits from Standard Manufacturing,” the suit said, adding that it was “at no time a manufacturer of apparel, did not have manufacturing facilities in Texas, and as Daren Arakelian’s alter ego, was not Standard Manufacturing ’s independent third party product vendor.”
The location of the supposed manufacturer was in a Dallas strip mall. It did not make apparel or have manufacturing facilities. But that did not keep Arakelian, in his role as Standard Manufacturer’s “purchasing agent,” from sending more than $3.5 million to the supposed
vendor between September 2009 and February 2020, the lawsuit said.
The family business demanded an accounting of tax returns and profits derived by Daren Arakelian, but it was not done, the suit states, referring to his alleged behavior as “fraudulent and unauthorized self-dealing that substantially damaged Standard Manufacturing.”
The siblings contend that in May 2022, Daren and Tracy Arakelian directed a “sham litigation” to be filed in a bad faith attempt to interfere with the transfer of the Standard Manufacturing building to a third party.
And the suit says Daren and Tracy Arakelian placed “undue influence upon George Arakelian for the purpose of fomenting sham litigation claims against plaintiffs and in general, cultivating a severely adversarial and hostile relationship between George Arakelian and Plaintiffs, including his other three children.” It 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 alleged 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 threemonth jail sentence last year. Arakelian duped federal agencies into believing his products — made in China — had been made in New York, California and Georgia. It was a violation of the Buy America Act. He paid more than $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 from the three siblings.