Burbank Man Pleads Guilty to Evading $11.2 Million in Federal Taxes, Medicare Fraud, and COVID-19 Business Relief

A Burbank man, Armen Muradyan, 60, has pleaded guilty to evading the payment of more than $11.2 million in federal taxes by using a shill to illegally collect Medicare reimbursement payments made to his blood-testing company, and to fraudulently obtaining nearly $100,000 in taxpayer-funded COVID-19 business relief. Muradyan's plea agreement revealed that he owned and operated a Burbank-based blood testing laboratory called Genex Laboratories Inc. Medicare and bank records show that Medicare paid millions of dollars in reimbursements to Genex for blood testing.

Muradyan used the proceeds from the health care fraud conspiracy to pay the mortgage on a property he owned. For the tax years of 2015 through 2020, Muradyan instructed his friend, L.S., to report Genex's financial activity on L.S.'s personal income tax returns using documents that L.S. provided to his own tax preparer. Muradyan also submitted income tax returns that reported none of Genex's financial activity as his own and that he averaged an income of $40,000 per year.

Key Takeaways:

• Muradyan pleaded guilty to one count of conspiracy to commit health care fraud, one count of wire fraud, and one count of tax evasion.
• Muradyan's blood testing laboratory, Genex Laboratories Inc., received millions of dollars in Medicare reimbursements for blood testing.
• Muradyan used a shill, L.S., to collect Medicare reimbursement payments and report Genex's financial activity on L.S.'s personal income tax returns.
• Muradyan submitted income tax returns that reported none of Genex's financial activity as his own and averaged an income of $40,000 per year.
• Muradyan used the proceeds from the health care fraud conspiracy to pay the mortgage on a property he owned.
• Muradyan also fraudulently obtained nearly $100,000 in taxpayer-funded COVID-19 business relief.
• Muradyan admitted to acting with the intent to deceive and cheat the SBA and Medicare.
• United States District Judge John A. Kronstadt scheduled a December 11 sentencing hearing.

Statistics:

• Over $11.2 million in federal taxes evaded by Muradyan.
• Approximately $23,915,762 in unreported federal taxable income for Muradyan.
• Approximately $11,236,357 in total federal income tax due and owing by Muradyan.
• $99,900 in taxpayer-funded COVID-19 business relief fraudulently obtained by Muradyan.
• 20 years in federal prison for the wire fraud count.
• Up to 10 years in federal prison for the health care fraud conspiracy count.
• Up to 5 years in federal prison for the tax evasion count.

Sources:

• United States Department of Justice - Press Release, Armen Muradyan Pleads Guilty to Tax Evasion, Medicare Fraud, and COVID-19 Business Relief Fraud (September 20, 2023)
• United States District Court, Central District of California - Case No. 2:22-cr-00185-JAK (plea agreement and indictment)