The number one case for criminal tax fraud in 2021, as ranked by the Internal Revenue Service Criminal Investigation unit (IRS:CI), was a family affair involving federal COVID relief programs.
Fraud involving COVID-19 pandemic relief programs was widespread and the government continues to pursue those who took advantage of the Economic Injury Disaster Loan (EIDL), Paycheck Protection Programs (PPP), the Child Nutrition Program, and other aid efforts. Officials estimate approximately ten percent of the $800 billion, or $80 billion, disbursed for the PPP was sent to fraudsters.
In May of 2021, the Attorney General created the COVID-19 Fraud Enforcement Task Force, a collaborative judicial effort of government entities. The IRS and these government agencies continue to pursue those who bilked the government and other individuals and entities in need of relief dollars.
In Los Angeles, IRS criminal tax investigators caught up with seven family members engaged in tax crimes around federal COVID relief plans. The crew, led by 47-year-old Richard Ayvazyan and his 37-year-old wife Marietta Terabelian, stole and created false identities to submit fraudulent applications to the PPP and EIDL programs. In addition to the false applications, the group fabricated tax documents, payroll tax records, and other fake documents for submission to the Small Business Administration. The group obtained more than $20 million through their collective efforts.
Mr. Ayvazyan and his wife and brother were convicted after an eight-day trial on several charges of bank and wire fraud, identity theft, and money laundering. At the sentencing hearing, the judge noted he could not recall a fraud case with “such callous, intentional way without any regard for the law." Mr. Ayvazyan was sentenced to 17 years in prison and his wife faces a six-year prison sentence. Prior to the trial four additional defendants pled guilty to similar charges and face sentences ranging from 18 months to six years in prison.
After conviction, the couple cut off their electronic tracking bracelets, took their dogs, and chartered a getaway plane to the Balkan country of Montenegro. They left behind their three teenage children and a note with their goodbyes.
The couple had planned for life on the lam. Having set up new identities with fake Mexican passports, the couple was living the seaside resort life, having shipped a Range Rover and BMW from California for their use. Residing in an enclave for the ultra-wealthy, they lived in a waterfront villa with a swimming pool. Details are scarce, but Mr. Ayvazyan was arrested at a hotel in a nearby town while his wife was cornered at a hair salon by authorities. The tide turned for the pair when Mr. Ayvazyan logged into one of the shell accounts he had set up using an email address in Montenegro. Although Mr. Ayvazyan has applied for political asylum, the odds of escaping the long arm of the IRS and the Justice Department are slim.
For audacity and scope, this case was ranked number one in criminal tax investigations in 2021 by the IRS:CI. Of the many mistakes made along the way, many human years will be spent behind prison walls. If you believe you could be charged with a tax crime, don’t wait—speak with an experienced criminal tax defense attorney before the IRS catches up with you—wherever you are in the world.
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