Federal authorities bust $25M COVID-19 relief fraud scheme, arrest 14 conspirators

• Federal authorities arrested 14 individuals in Southern California for allegedly stealing over $25 million from COVID-19 relief programs by submitting fake tax returns, falsifying records and laundering funds overseas. Four suspects remain at large, believed to be in Armenia.
• Among those charged, Vahe Margaryan allegedly created sham companies and laundered millions, while Felix Parker fraudulently obtained $2 million for a nonexistent business. Others, like Axsel Markaryan and Sarkis Sarkisyan, secured loans before transferring funds abroad or inventing businesses.
• The arrests followed a lengthy probe uncovering a sophisticated criminal network active since 2018. Authorities seized $20,000 in cash, firearms and money-counting equipment, highlighting the scheme’s scale.
• The case exposes vulnerabilities in pandemic aid programs, which initially lacked strict oversight. The DOJ’s COVID-19 Fraud Task Force is intensifying efforts to recover stolen funds and deter future fraud.
• The crackdown mirrors past disaster relief fraud cases (e.g., Hurricane Katrina). Officials warn against exploiting emergency funds and urge the public to report fraud via the National Center for Disaster Fraud hotline.

Federal authorities have arrested 14 individuals in Southern California for allegedly orchestrating a sprawling fraud scheme that siphoned more than $25 million from Wuhan coronavirus (COVID-19) relief programs meant to aid struggling small businesses.

The defendants, including residents of the San Fernando Valley and Glendale, are accused of exploiting federal loan initiatives such as the Paycheck Protection Program and Economic Injury Disaster Loans. The conspirators defrauded the government by submitting fabricated tax returns, falsifying business records and laundering funds overseas.

Four additional suspects believed to be in Armenia remain at large, according to the Department of Justice (DOJ). The arrests made on Wednesday, May 28, followed a multi-agency investigation that uncovered a sophisticated criminal network operating since at least 2018.

Among those charged is 42-year-old Vahe Margaryan of Tujunga. He allegedly directed the creation of sham companies, falsified financial statements and purchased fraudulent tax returns to secure loans. Prosecutors claim Margaryan’s operation laundered millions through shell accounts before his alleged activities were halted in January 2025.

Felix Parker of North Hollywood was also among those arrested on Wednesday. The 77-year-old Parker allegedly obtained over $2 million by submitting fake tax returns for a nonexistent promotional products company. (Related: Government report reveals criminals stole BILLIONS from unemployment benefits during pandemic.)

The scheme extended beyond domestic borders. Forty-seven-year-old Axsel Markaryan of Pacoima, reportedly secured $5 million in Small Business Administration loans before transferring at least $100,000 to an accomplice in Armenia. Meanwhile, 37-year-old Sarkis Sarkisyan of Glendale allegedly fabricated an entire business to fraudulently claim more than $700,000 in Paycheck Protection Program funds.

DOJ cracks down, threatens decades in prison for pandemic fraudsters

Law enforcement seized $20,000 in cash, firearms and money-counting equipment – highlighting the operation’s scale. According to the DOJ, each defendant would be facing decades behind bars if convicted.

The case highlights vulnerabilities in pandemic-era relief programs, which disbursed billions with limited oversight in the early stages of the crisis. Special Agent Tyler Hatcher of the Internal Revenue Service – Criminal Investigation’s Los Angeles Field Office emphasized that the defendants “pilfered” funds intended for legitimate businesses in distress.

The DOJ’s COVID-19 Fraud Enforcement Task Force, established in 2021, has since intensified efforts to recover stolen funds. Bill Essayli, interim U.S. Attorney for the Central District of California, vowed to pursue those who “cheat the system.” He said the May 28 raid and subsequent arrests seek to “send a message to all criminals who take advantage of government programs designed to help those who need them most.”

Historical parallels exist in past disaster relief fraud cases, such as after Hurricane Katrina, when lax oversight led to an estimated $1 billion in fraudulent payouts. Decades on, the current crackdown reflects a broader push to hold perpetrators accountable.

As the cases proceed, the DOJ urges the public to report suspected fraud through its National Center for Disaster Fraud hotline. For now, the arrests underscore a stark reality. While emergency funds serve as a lifeline for many, they also attract criminal networks eager to exploit crises.

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Watch this clip from “Snyder Reports” on how unemployment benefits fraud cost Americans billions in tax dollars.

This video is from the TREASURE OF THE SUN channel on Brighteon.com.

More related stories:

Secret Service: Almost $100 billion worth of COVID relief funds STOLEN.

California lost $11 billion to fraudulent unemployment claims, state officials say.

Wife of former Connecticut state representative admits to stealing COVID-19 funds.

Forensic accounting expert: HALF of pandemic relief funds ended up in the hands of America’s ENEMIES.

Sources include:

TheEpochTimes.com

Justice.gov

Brighteon.com