The following is according to court documents and statements made in court: from approximately 2015 to 2023, Armen Muradyan, of Burbank, owned and operated Genex Laboratories, a blood testing laboratory. Muradyan paid a nominee to pose as Genex’s owner, even though Muradyan solely controlled all aspects of Genex and the nominee neither owned nor operated Genex. The nominee also held Genex’s bank accounts into which Medicare deposited more than $23 million in reimbursements. Muradyan provided the nominee annual financial summaries purporting to show Genex had little or no income tax liability, and he instructed the nominee to report Genex’s financial activity on the nominee’s personal tax returns. The nominee provided these financial documents to his tax preparer, who prepared the nominee’s tax returns using the false information provided by Muradyan.

During these same years, Muradyan submitted his own federal tax returns that did not report any of  Genex’s financial activity or the millions Muradyan used from Genex to pay for personal expenses.

In total, Muradyan is alleged to have caused a tax loss to the IRS of more than $8.5 million, and approximately $2.7 million to the state of California.

Finally, in 2020, Muradyan submitted a false COVID-19 Economic Injury Disaster Loan (EIDL) application. Under the EIDL program — created to aid small businesses struggling during the COVID-19 pandemic — a small business could receive a loan of up to $150,000 to cover six months of working capital. Muradyan filed the loan application on behalf of a fictitious company that Muradyan claimed had employees and generated nearly $1 million in income in 2019. In reality, Muradyan knew that the company did not have employees or income that year. As a result of his false application, Muradyan received nearly $100,000 in loans and used the proceeds for personal expenses, which was not permitted under the loan program.

Muradyan pleaded guilty to conspiracy to commit health care fraud, wire fraud, and tax evasion.

Muradyan is scheduled to be sentenced on Dec. 11. He faces a maximum penalty of 20 years in prison for wire fraud, a maximum penalty of 10 years in prison for conspiring to commit health care fraud, and a maximum penalty of five years in prison for tax evasion. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

IRS Criminal Investigation, the FBI, and the Department of Health and Human Services, Office of Inspector General are investigating the case.

Trial Attorney Mahana Weidler of the Justice Department’s Tax Division and Assistant U.S. Attorney Mark Aveis for the Central District of California are prosecuting the case