Federal authorities have arrested 14 people in connection with a wide-ranging scheme that allegedly defrauded U.S. COVID-19 relief programs and small business loan initiatives out of more than $25 million.

The arrests stem from two federal criminal complaints filed in the Central District of California, which name 18 defendants in total, including four individuals believed to be in Armenia. The alleged crimes include conspiracy to defraud the government, wire fraud, bank fraud, money laundering, and structuring financial transactions to avoid reporting requirements.

Among those arrested:

• Vahe Margaryan, a.k.a. “William McGrayan,” 42, of Tujunga, allegedly orchestrated the scheme, directing co-conspirators to submit false loan applications supported by phony financial documents, including fabricated tax returns.
• Sarkis Gareginovich Sarkisyan, 37, a.k.a. “Samuel Shaw,” of Glendale, is accused of obtaining over $700,000 in Paycheck Protection Program (PPP) funds through a fake business.
• Mery Babayan, 32, of Van Nuys, and Hovannes Hovannisyan, 48, of Panorama City, allegedly collaborated with Margaryan to defraud a bank out of $3 million through a sham business sale.
• Felix Parker, 77, of North Hollywood, allegedly secured $2 million using false statements and fraudulent tax documents for a shell company.
• Axsel Markaryan, 47, a.k.a. “Axel Mark,” of Pacoima, is charged with fraudulently obtaining more than $5 million in SBA loans and laundering funds to Armenia.

Law enforcement officials seized $20,000 in cash, money-counting machines, multiple electronic devices, loaded firearms, and boxes of ammunition during the operation.

“Today’s enforcement action is intended to send a message to all criminals who take advantage of government programs designed to help those who need them most,” said United States Attorney Bill Essayli.

Federal officials emphasized that small businesses and pandemic relief programs remain a top priority for prosecution when abused. The investigation was led by SBA-OIG, IRS Criminal Investigation, HSI, and the El Camino Real Financial Crimes Task Force.

The cases are being prosecuted by Assistant U.S. Attorneys from the Major Frauds and Cyber and Intellectual Property Crimes Sections.

This article, “14 Arrested in $25 Million COVID-19 Relief and SBA Loan Fraud Scheme” was first published on Small Business Trends