The U.S. Department of Justice (DOJ) announced that Montenegro extradited Richard Ayvazyan and his wife, Marietta Terabelian, to the U.S. to serve multi-year prison sentences for conspiring to defraud COVID-19 relief programs.
According to the DOJ, Mr. Ayvazyan and Mrs. Terabelian were members of a fraud ring in Los Angeles that illegally obtained at least $20 million in Covid-19 Relief funds, particularly from the Paycheck Protection Program and the Economic Injury Disaster Loan program. The Paycheck Protection Program (PPP) helped small businesses pay their employees and meet expenses during the COVID-19 pandemic. The Economic Injury Disaster Loan (EIDL) program is a federal loan initiative that can provide financial help to small businesses or private, non-profit organizations that suffer substantial economic injury because of the declared disaster.
According to the DOJ press release, citing evidence at the June 2021 trial, Mr. Ayvazyan and Mrs. Terabelian (along with other members of the scheme) used fake, stolen, or synthetic identities to submit fraudulent applications for PPP funds and EIDL loans. About 150 fraudulent PPP and EIDL applications were submitted, according to the government. Like other schemes to defraud COVID-10 relief programs, Mr. Ayvazyan and Mrs. Terabelian submitted false or fake documents supporting the fraudulent applications, including false tax returns, fake identification documents, and false payroll records. Also similar to other COVID-19 schemes, Mr. Ayvazyan and Mrs. Terabelian bought luxury items with the fraudulently obtained relief funds, including homes, watches, diamonds, gold coins, designer handbags, fine imported furnishings, and a Harley-Davidson motorcycle.
In June 2021, Mr. Ayvazyan and Mrs. Terabelian were convicted of leading a conspiracy to fraudulently obtain $20 million in COVID-19 relief funds. The couple then fled the United States to Montenegro in the Balkans. On November 15, 2021, the couple was sentenced in absentia. Mr. Ayvazyan received a 17-year prison sentence, while his wife, Mrs. Terabelian received a five-year prison sentence. The government located the couple in Montenegro and the Justice Department’s Office of International Affairs assisted with securing the arrest and extradition of the couple. The DOJ also noted that the government of Montenegro provided significant assistance in the extradition process.
The DOJ announcement is the latest example of the government’s willingness to investigate and pursue individuals that defraud the COVID-19 relief programs. As the government often reminds the public, “the Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP.” The Fraud Section alone has prosecuted over 121 criminal cases related to CARES Act programs and funds.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations. If you need assistance with such a matter, please contact us today.