LOS ANGELES – A San Fernando Valley man now believed to have fled the United States today faces federal criminal charges for allegedly obtaining more than $860,000 in Paycheck Protection Program (PPP) loans for a shell company and then transferring the bulk of his illicit gains to his personal bank accounts.
Arman Manukyan, 49, of Panorama City, was charged today with one count of bank fraud and one count of aggravated identity theft in a criminal complaint filed Monday in U.S. District Court.
This investigation was led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Los Angeles, in concert with the Treasury Inspector General to the Tax Administration, the Small Business Administration – Office of Inspector General, the U.S. Postal Inspection Service, and the Employment Development Department, Investigation Division.
According to an affidavit in support of the complaint, Manukyan in June submitted two applications for PPP loans to Bank of America for $1.7 million on behalf of two shell companies registered in his name – Argo Global, Inc., and Express Wiring.
Manukyan allegedly claimed Argo Global was a sewing business with 73 employees and submitted to Bank of America, and later the Small Business Administration, false tax documents purporting to show wages and taxes for the company. The underwriting packet also did not include a list of employees or associates for Argo Global, which listed a virtual office address in Beverly Hills as its place of business, according to the affidavit. Ultimately, an $867,187 loan was approved for Argo Global, Inc.
Shortly after receiving the funds in Argo Global’ s name, Manukyan allegedly transferred most of the balance to two of his personal bank accounts. When a bank investigator contacted Manukyan after one of his accounts had been frozen because of suspicious activity, he allegedly told the bank he was going to use the PPP loan to start a limousine business, contradicting what he wrote on his loan application.
In June, Manukyan also allegedly submitted to Bank of America a loan application of $884,748 for Express Wiring, a shell company with a Glendale address. The Small Business Administration rejected the application, indicating it either had been submitted after the June 22 deadline for PPP loans or the allocated PPP funds had run out.
In July, a seizure warrant was executed on Manukyan’s bank accounts, recovering $866,019.
A search warrant executed by HSI special agents and law enforcement partners at Manukyan’s home on July 22 revealed multiple debit cards used for unemployment benefits from the California Employment Development Department (EDD) that were in the names of different people. Manukyan allegedly told law enforcement that he found two of the EDD cards on the street and decided to keep them, but insisted that he never used them. Investigators recovered another $118,474 from debit cards linked to Manukyan.
On August 9, HSI and partner investigators received information that Manukyan had boarded a flight from Mexico City inbound to Paris with a final destination of Minsk, Belarus.
If convicted of both charges, Manukyan would face a statutory maximum sentence of 32 years in federal prison. This case is being prosecuted by U.S. Attorney for the Central District of California’s Major Frauds Section.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized more than $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
In April, HSI launched Operation Stolen Promise to prevent and investigate illegal criminal activity surrounding the pandemic, strengthen global supply-chain security and protect the American public. Operation Stolen Promise combines HSI’s expertise in global trade, financial fraud, international operations and cyber-crime to investigate financial fraud schemes, the importation of prohibited pharmaceuticals and medical supplies, websites defrauding consumers, and any other illicit criminal activities associated with the virus that compromises legitimate trade or financial systems or endangers the public.
One of the main goals of Operation Stolen Promise is to educate the public on the various types of fraudulent activity targeting innocent victims, how to identify this type of crime, and how to report it to authorities. HSI is using its Strategic Targeted Outreach Program (S.T.O.P.) to equip the public with the tools to do just that, and to help HSI and its law enforcement partners combat COVID-19 Fraud. The S.T.O.P. COVID-19 FRAUD campaign provides red flag indicators and asks people to report COVID-19 Fraud to COVID19FRAUD@DHS.GOV.