A Burbank resident has admitted to evading more than $11.2 million in federal taxes and fraudulently collecting nearly $100,000 in COVID-19 business relief funds. Armen Muradyan, 60, pleaded guilty to conspiracy to commit health care fraud, wire fraud, and tax evasion, according to the Justice Department.
Muradyan owned Genex Laboratories Inc., a blood testing laboratory based in Burbank. Court documents show that Medicare paid millions of dollars in reimbursements to Genex for blood testing services. However, because Muradyan was banned from submitting claims directly to Medicare, he used a long-time friend identified as “L.S.” as a front for the company. L.S. was paid $2,000 per month by Muradyan to pose as Genex’s owner and submit Medicare enrollment papers on behalf of the company.
Bank accounts were opened in L.S.’s name but controlled by Muradyan. L.S., who did not operate or own Genex, visited the office only to collect his monthly payment or sign documents at Muradyan’s request. Proceeds from this scheme were used by Muradyan to pay his property mortgage.
From 2015 through 2020, Muradyan directed L.S. to report Genex’s financial activity on L.S.’s personal tax returns using documents that made it appear the company had little profit or operated at a loss. Meanwhile, Muradyan filed his own tax returns reporting none of Genex’s income and claiming an average annual income of $40,000—despite personally receiving millions in Medicare reimbursements.
Muradyan also failed to file any tax returns from 2021 through 2023. The unreported federal taxable income totaled approximately $23.9 million over several years, resulting in more than $11 million owed in federal taxes.
In July 2020, during the COVID-19 pandemic response period when various relief programs were available (https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form), Muradyan submitted a fraudulent application for an Economic Injury Disaster Loan (EIDL) funded by taxpayers. He falsely claimed that another business he controlled employed multiple people and generated significant revenue when it had neither employees nor income for the year cited on the application. The U.S. Small Business Administration approved nearly $100,000 based on these false statements; Muradyan then used those funds for personal expenses not allowed under EIDL terms.
“United States District Judge John A. Kronstadt scheduled a December 11 sentencing hearing, at which time Muradyan will face a statutory maximum sentence of 20 years in federal prison for the wire fraud count, up to 10 years in federal prison for the health care fraud conspiracy count, and up to five years in federal prison for the tax evasion count,” according to officials.
Muradyan is currently free on bond set at $2.6 million while awaiting sentencing.
The case was investigated by IRS Criminal Investigation, the FBI, and the United States Department of Health and Human Services Office of Inspector General.
Assistant United States Attorney Mark Aveis of the Major Frauds Section and Trial Attorney Mahana K. Weidler of the Department of Justice’s Tax Division are prosecuting this case.
“Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.”
