Former banker and brother charged in COVID relief fraud case in LA
Former banker and brother charged in COVID relief fraud case in LA
LOS ANGELES — A former Wells Fargo banker and his brother are facing federal charges in Los Angeles alleging they fraudulently obtained nearly $2.7 million in COVID-19 relief funds and small business loans partly by using the stolen identities of developmentally disabled persons who lived in long-term care facilities, the U.S. Department of Justice announced Thursday.
Norayr Madadi, 40, of Burbank, and Vazrik Madadi, 44, of Glendale, are charged with one count of conspiracy to commit wire fraud, two counts of wire fraud and three counts of money laundering. Norayr Madadi is separately charged with one count of aggravated identity theft and one count of making a false statement to a government agent, according to the DOJ.
At their arraignment Wednesday following their arrest, a magistrate judge in L.A. federal court ordered Norayr Madadi released on $25,000 bond and granted Vazrik Madadi’s release on $50,000 bond. A Sept. 2 trial date was scheduled.
According to the indictment, Norayr Madadi was a banker at Wells Fargo and allegedly opened fraudulent accounts in the names of shell companies and persons including using stolen and phony identities.
The DOJ contends that from March 2020 through April 2021, the defendants obtained millions of dollars in Paycheck Protection Program and Economic Injury Disaster Loan Program loans by submitting loan applications with false statements about revenue, operations and employees. The defendants allegedly used fake and stolen identities to further the scheme, including the stolen identities of two victims who are developmentally disabled and live in long-term care facilities, court papers show.
The funds were disbursed into bank accounts controlled by the defendants, including the Wells Fargo bank accounts opened by Norayr Madadi, prosecutors allege. The Madadi brothers allegedly spent the loan proceeds at casinos, paying for luxury cars and jewelry, and cash withdrawals.
Law enforcement believes the losses caused by the scheme are nearly $2.7 million.
If convicted, each defendant would face a sentence of up to 20 in federal prison for each wire fraud-related count and up to 10 years for each money laundering count. Norayr Madadi would face up to five years in federal prison if convicted of the false statements count and would face a mandatory two-year consecutive prison term if convicted of the aggravated identity theft count, prosecutors noted.
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