Details of the fraud
The eight individuals involved in the fraud ring are Richard Ayvazyan, Marietta Terabelian, Artur Ayvazyan, Manuk Grigoryan, Edvard Paronyan, Vahe Dadyan, Arman Hayrapetyan, and Tamara Dadyan.
Taking advantage of the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL)—two programs under the CARES Act—the fraudsters misappropriated over US$20 million* in COVID-19 relief funds by falsifying a number of legal documents:
To apply for loan programs, the defendants created sham businesses, attached fake payroll documents, and forged tax returns to the applications.
Fake, stolen, or synthetic identities were used to open bank accounts for the businesses.
They created fake employer identification numbers (EINs) that were used in phony payroll reports to enhance their legitimacy.
Fake identification documents and corresponding chequebooks, phony business credit cards, and notary stamps and seals belonging to state and federal courts were found during an FBI raid.
The group submitted fictitious documents to lenders and the U.S. Small Business Administration (SBA), a government agency that provides support to entrepreneurs and small businesses.
They used the embezzled funds to pay for down payments on luxury homes in the California cities of Tarzana, Glendale, and Palm Desert, as well as to purchase gold coins, diamonds, jewelry, luxury goods, imported fine goods, and a Harley-Davidson motorcycle.