Glendale man to be sentenced in pandemic relief fraud case – NBC Los Angeles

Introduction to the Case

A Glendale man is scheduled to be sentenced March 2 for conspiring to commit bank fraud in connection with a scheme that submitted more than $1.9 million in falsified claims to the government for COVID-19 pandemic relief funds.

Sarkis Garadzhyan pleaded guilty Monday in Los Angeles federal court to a single count of conspiracy to commit bank fraud, according to the Internal Revenue Service.

The Scheme

Prosecutors said Garadzhyan and co-conspirators created and operated multiple fake businesses, including one called Arizona Hospice Inc., to fraudulently apply for federal pandemic relief program funds. The defendant falsely claimed to have large payrolls at several shell companies and submitted forged tax documents to support the applications, according to his plea agreement.

Consequences of the Scheme

"Mr. Garadzhyan deliberately stole from programs designed to keep American businesses afloat during a national emergency,” Tyler Hatcher, IRS Criminal Investigation special agent in charge, Los Angeles bureau, said in a statement. "Such blatant abuse of taxpayer-funded relief will not be tolerated. The men and women of IRS-CI will continue to pursue criminals who exploit pandemic relief funds."

Details of the Fraud

Using stolen identities, Garadzhyan and his co-conspirators secured a $150,000 Economic Injury Disaster Loan and a $929,433 Paycheck Protection Program loan. They also obtained an additional $842,666 PPP loan in the name of Arizona Hospice, which was later frozen by Bank of America due to suspected fraud, federal prosecutors said. Despite knowing the funds were obtained fraudulently, the defendant attempted to persuade the bank to release the money by falsely claiming it was needed to meet payroll obligations — when, in fact, the company had no employees, court papers show.

Potential Sentence

Garadzhyan could face up to 30 years in federal prison at sentencing, prosecutors said.

Conclusion

The case of Sarkis Garadzhyan serves as a reminder of the importance of integrity and honesty, especially during times of national crisis. The exploitation of pandemic relief funds is a serious offense that can have significant consequences. It is crucial for individuals and businesses to adhere to the law and respect the purpose of these funds, which are designed to support those genuinely in need.

FAQs

1. What is the maximum sentence Garadzhyan could face?
   • Garadzhyan could face up to 30 years in federal prison.
2. How much did Garadzhyan and his co-conspirators obtain in fraudulent loans?
   • They secured a $150,000 Economic Injury Disaster Loan, a $929,433 Paycheck Protection Program loan, and an additional $842,666 PPP loan.
3. What was the purpose of the fake businesses created by Garadzhyan and his co-conspirators?
   • The fake businesses were created to fraudulently apply for federal pandemic relief program funds.
4. Why was the $842,666 PPP loan frozen by Bank of America?
   • The loan was frozen due to suspected fraud.