Burbank Man Pleads Guilty to Evading $11.2 Million in Federal Taxes Through Medicare Fraud and Tax Relief Scam

Strategic Insights -

A 60-year-old Burbank man, Armen Muradyan, 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 and to fraudulently obtaining nearly $100,000 in taxpayer-funded COVID-19 business relief. Muradyan, the owner and operator of Genex Laboratories Inc., a Burbank-based blood testing laboratory, admitted to conspiring to commit health care fraud, wire fraud, and tax evasion. He faces a statutory maximum sentence of 20 years in federal prison, up to 10 years for health care fraud conspiracy, and up to five years for tax evasion.

Key Takeaways:

  • Muradyan 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.
  • He also pleaded guilty to fraudulently obtaining nearly $100,000 in taxpayer-funded COVID-19 business relief by submitting a false application for an Economic Injury Disaster Loan (EIDL) to the U.S. Small Business Administration (SBA).
  • Muradyan used the proceeds from the health care fraud conspiracy to pay the mortgage on a property he owned and to support his expensive lifestyle.
  • He instructed his friend, L.S., to report Genex's financial activity on L.S.'s personal income tax returns, which resulted in L.S. reporting minimal net profit or operating loss for the company.
  • Muradyan 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.
  • The total unreported federal taxable income was approximately $23,915,762, resulting in a total federal income tax due and owing by him of approximately $11,236,357.

Statistics:

  • Muradyan evaded payment of more than $11.2 million in federal taxes.
  • He fraudulently obtained nearly $100,000 in taxpayer-funded COVID-19 business relief through the SBA's EIDL program.
  • The total unreported federal taxable income was approximately $23,915,762.
  • The total federal income tax due and owing by Muradyan was approximately $11,236,357.

Sources:

  • United States Attorney's Office for the Central District of California