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October 11, 2016

Prosecutors Secure Guilty Pleas and File Asset Forfeiture Actions in International Money Laundering and Identity Theft Scheme involving Fraudulent Tax Returns that Sought $38 Million in Refunds

Filed under: California Defense Attorney — fayarfa @ 11:08 am

SANTA ANA, California – Federal prosecutors have secured guilty pleas from seven defendants who participated in a large-scale international identity theft scheme that laundered more than $14 million in fraudulently obtained tax refunds by using bogus Republic of Armenia passports.

This week, special agents with IRS Criminal Investigation posted a forfeiture notice on a Woodland Hills residence that prosecutors are seeking to forfeit based on allegations that it was purchased with illegally obtained money. Last month, the United States Attorney’s Office filed a civil asset forfeiture lawsuit against three Van Nuys properties and alleged criminal forfeiture against the Woodland Hills property, which cumulatively have more than $1 million in equity. According to the civil complaint, some of those properties were purchased with cash with fraudulent Armenian passports used as identification.

And, in a third development stemming from the investigation, a federal grand jury in Santa Ana last month returned an indictment charging an eleventh defendant with mortgage fraud, bank fraud, and aggravated identity theft. While not directly related to the stolen identity refund fraud (SIRF) case, Aramais Airapetian, 24, of Woodland Hills, was charged as a result of the same investigation with using fraudulent documents, including fake pay stubs and altered bank statements, to obtain a mortgage from loanDepot.com. Criminal forfeiture is also alleged against the Woodland Hills house that Airapetian allegedly purchased using the mortgage proceeds he fraudulently obtained. If he is convicted, Airapetian could face decades in federal prison.

With the indictment of Airapetian, 11 defendants now have been charged as a result of the investigation. Seven defendants have pleaded guilty, one is a fugitive, and three (including Airapetian) are pending trial.

“Stolen identity refund fraud schemes have become a significant, nationwide problem that victimize the United States government, individuals who are identity theft victims and all taxpayers who end up paying for these fraudulent schemes,” said United States Attorney Eileen M. Decker. “These defendants created a complex, international scheme in an effort to conceal their fraud, but it was not sufficient to shield them from discovery and prosecution.”

Authorities initially announced this case in April when nine of the 10 defendants accused of being part of a money laundering ring were arrested. According to court documents, those defendants used hundreds of bank accounts that had been opened with stolen identities to launder millions of dollars in fraudulently obtained tax refunds. The IRS has identified approximately 7,000 fraudulent tax returns related to this scheme that cumulatively sought about $38 million in refunds. The IRS issued about $14 million in refunds, which were deposited into and laundered through bank accounts used in this scheme. The fraudulent tax returns were filed and the bank accounts were opened with personal identifying information (PII) that had been stolen from thousands of victims.

“Identity theft and tax refund fraud were the lifeblood that these defendants used to further their massive money laundering fraud scheme,” stated Acting Anthony J. Orlando, Special Agent in Charge for IRS Criminal Investigation. “IRS Criminal Investigation will not rest until this investigation has been fully adjudicated and those responsible for these felonious crimes are held accountable.”

The 10 defendants initially charged, each of whom was named in a separate criminal complaint, allegedly used fraudulent foreign passports to commit identity theft by opening numerous bank accounts and mailbox addresses with the stolen identities. According to the criminal complaints, they used fraudulent passports from the Republic of Armenia, Georgia, and the Czech Republic that had the names of identity theft victims but the defendants’ photographs. The mailboxes and bank accounts were opened across Los Angeles and Orange counties.

“The complexity and audacity of this scheme were truly astounding and illustrate the lengths to which fraudsters will go to game the system for financial gain,” said Joseph Macias, special agent in charge of HSI Los Angeles. “Identity theft and tax fraud result in billions of dollars in losses every year in this country and cause tremendous heartache and financial harm to law-abiding consumers. We owe it to them to pursue these cases aggressively, making it clear that those who brazenly enrich themselves on the back of the American taxpayer, as these defendants allegedly did, will be held accountable for their crimes.”

The seven defendants who have pleaded guilty before United States District Judge Andrew J. Guilford are:

· Konstantin Galstyan, 23, of Lake View Terrace, who pleaded guilty on September 30 to bank fraud and identity theft and is scheduled to be sentenced on December 5;

· Artash Stepanyan, 31, of Glendale, who pleaded guilty in June to identity theft, admitted causing losses of more than $1 million and is scheduled to be sentenced on January 27;

· Sargis “Sergio” Tabadzhyan, 54, of West Hollywood, who pleaded guilty in June to identity theft and is scheduled to be sentenced on November 7;

· Arman Galstyan, aka “Mkhitar Mkrtchyan,” 43, of Sylmar, who pleaded guilty in June to identity theft and is scheduled to be sentenced on November 14;

· Armen Khachkalyan, 48, of Glendale, who pleaded guilty in July to identity theft and is scheduled to be sentenced on October 24;

· Eduard Astvatsatryan, 34, of Glendale, who pleaded guilty to identity theft in August and is scheduled to be sentenced on December 12; and

· Hripsime Avagyan, 24, of Burbank, who pleaded guilty to identity theft in June and is scheduled to be sentenced on January 30.

The identity theft charges to which the seven defendants have pleaded guilty carry a statutory maximum sentence of 15 years in federal prison and a $250,000 fine.

The civil asset forfeiture action filed last month seeks forfeiture of three Van Nuys condominiums and alleges that the purchases of those real properties facilitated the concealment of the proceeds from the SIRF scheme in a process that included purchases and sales of gold.

The ongoing investigation into money laundering involving fraudulently obtained tax refunds and related frauds is being conducted by IRS Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and the Federal Bureau of Investigation.

The case is being prosecuted by Assistant United States Attorney Charles Pell of the Santa Ana Branch Office. Assistant United States Attorney Frank Kortum represents the United States in the civil forfeiture action.

USAO - California, Central Updated October 11, 2016

Central District of California DOJ / 16-242 / October 7, 2016

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