Nursing student Jessica Lam, right, administers a COVID-19 test inside Milford High School in Milford, Massachusetts on Dec. 18, 2020.
Los Angeles, California – Authorities arrested fourteen individuals across the San Fernando Valley and Glendale in a wide-ranging federal investigation that alleges they were part of a sophisticated scheme to fraudulently obtain more than $25 million in COVID-19 relief funds and federally backed small business loans. The charges, unsealed today, accuse 18 total defendants—four of whom are believed to be in Armenia—with a variety of financial crimes including wire fraud, bank fraud, conspiracy to launder money, and submitting false claims to the federal government.
The arrests stem from two criminal complaints targeting individuals who allegedly abused programs intended to help small businesses survive the economic impact of the pandemic. According to prosecutors, the defendants fabricated businesses, forged financial documents, and laundered stolen taxpayer funds through elaborate transactions involving shell companies and foreign accounts.
Among those arrested is 42-year-old Vahe Margaryan of Tujunga, also known as “William McGrayan,” who prosecutors allege was the ringleader. Authorities have accused Margaryan of orchestrating a scheme that spanned from 2018 through January 2025, during which he directed individuals to create sham corporations, submit falsified financial statements, and obtain fraudulent loans through the SBA’s Preferred Lender Program.
Another defendant, Sarkis Gareginovich Sarkisyan, 37, of Glendale, allegedly submitted bogus documentation in 2021 to secure more than $700,000 in Paycheck Protection Program funds for a fake business. Authorities have accused Mery Babayan of Van Nuys and co-defendants of fabricating a $3 million loan deal involving the sale of a nonexistent company. Others, like Felix Parker, 77, of North Hollywood, and Axsel Markaryan, 47, of Pacoima, allegedly used fake tax returns to secure multimillion-dollar loans, then laundered the money—including international transfers to Armenia.
In coordinated raids, federal agents seized approximately $20,000 in cash, two loaded semi-automatic firearms, paper money straps, and evidence of laundering operations including money counters and electronic devices. The arrests are part of a broader federal crackdown led by the U.S. Attorney’s Office in Los Angeles and the Department of Justice’s COVID-19 Fraud Enforcement Task Force.
“These individuals defrauded programs meant to provide a lifeline to struggling small businesses during a national crisis,” said U.S. Attorney Bill Essayli. “Their greed undermined trust in the system and diverted vital funds from those truly in need.”
If convicted, the defendants face decades in federal prison. The case underscores the ongoing efforts of the DOJ’s Strike Force initiative, which targets pandemic-related financial fraud across California and the nation.
