In short
- He fabricated businesses and financial records to obtain $4,866,457 in fraudulent loans.
- Sarkisyan laundered proceeds through shell companies and associates to conceal their origin.
What happened
Sarkis Sarkisyan, a North Hollywood resident, was sentenced to 70 months in federal prison for wire fraud and transactional money laundering related to COVID-19 relief and small business lending programs. He pleaded guilty to two counts of wire fraud and one count of money laundering, including a $786,457 PPP loan and a $25,000 laundering transaction.
Sarkisyan orchestrated additional fraud involving SBA Preferred Lender Program loans totaling more than $4 million and attempted to obtain two Economic Injury Disaster Loans of $500,000 each. He fabricated businesses, payrolls, IRS tax forms, and financial records, then transferred proceeds through shell companies and associates.
Sarkisyan “participated in a massive scheme to defraud multiple banks and, ultimately, taxpayers, out of almost $5 million in funds from lending programs designed to benefit small businesses and those in need during the COVID-19 pandemic,” prosecutors argued in their sentencing memorandum.
In numbers
- 70 months prison sentence for Sarkis Sarkisyan
- $4,866,457 fraudulently obtained loan proceeds
- $786,457 fraudulent PPP loan application
What compliance teams should check
- Review loan applications for fabricated businesses, payrolls, IRS tax forms, and financial records as seen in Sarkisyan's scheme.
- Monitor shell company transactions and associate transfers for concealment of loan proceeds, referencing Sarkisyan's laundering methods.
- Cross-check SBA Preferred Lender Program and Economic Injury Disaster Loan applications for patterns matching Sarkisyan's $4 million and $500,000 fraud attempts.
Why it matters
This case highlights the vulnerability of federal relief programs to sophisticated fraud schemes involving fabricated documentation and shell companies. Compliance officers must be vigilant in detecting falsified business records and unusual fund transfers, especially in high-volume relief programs. The nearly $5 million loss underscores the importance of robust due diligence and monitoring to prevent exploitation of taxpayer-funded initiatives, protect financial institutions, and ensure legitimate businesses receive intended support.
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