North Hollywood Man Sentenced for $5M COVID-19 Relief Fraud
Sarkis Sarkisyan receives over five years in federal prison for orchestrating fraudulent schemes involving federal relief funds.
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A North Hollywood man, Sarkis Sarkisyan, has been sentenced to 70 months in federal prison for his involvement in fraudulent schemes that resulted in nearly $5 million in losses to federal COVID-19 relief and small business lending programs. The sentencing was handed down by United States District Judge Cynthia Valenzuela.
Sarkisyan, 38, pleaded guilty on April 29 to two counts of wire fraud and one count of transactional money laundering. These charges stemmed from his fraudulent application for a $786,457 Paycheck Protection Program (PPP) loan and a subsequent $25,000 laundering transaction. Additionally, Sarkisyan orchestrated fraud involving Small Business Administration (SBA) Preferred Lender Program loans totaling more than $4 million and attempted to obtain two Economic Injury Disaster Loans of $500,000 each.
According to court records, Sarkisyan fabricated businesses, payrolls, IRS tax forms, and financial records to secure federally backed loans meant to support legitimate small businesses during the COVID-19 pandemic. He and his co-schemers transferred the proceeds through shell companies and associates to conceal the origin of the illicit funds. In total, Sarkisyan and his co-schemers received $4,866,457 in fraudulently obtained loan proceeds, most of which ultimately benefited Sarkisyan personally.
Prosecutors, in their sentencing memorandum, described Sarkisyan's actions as a "massive scheme to defraud multiple banks and, ultimately, taxpayers." They argued that his scheme involved fabricating businesses to make them appear as legitimate entities deserving of taxpayer-funded support during the pandemic. By doing so, Sarkisyan "exploited the goodwill of lenders and taxpayers."
The investigation into Sarkisyan's fraudulent activities was conducted by the SBA Office of Inspector General (SBA-OIG), IRS Criminal Investigation, and Homeland Security Investigations (HSI). Assistant United States Attorneys Andrew M. Roach and David C. Lachman of the Major Frauds Section prosecuted the case.
A deferred restitution hearing is scheduled for December 4, where further financial penalties may be determined.
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