A former banker from Wells Fargo & Co. and his brother have been arrested following an eight-count federal grand jury indictment. The charges allege that they fraudulently obtained over $2.7 million in COVID-19 relief funds and federally-guaranteed small business loans. The scheme reportedly involved using stolen identities of developmentally disabled individuals residing in long-term care facilities.
Norayr Madadi, 40, from Burbank, and Vazrik Madadi, 44, from Glendale, were taken into custody on Wednesday morning. Both face charges including conspiracy to commit wire fraud, wire fraud itself, and money laundering. Norayr Madadi is additionally charged with aggravated identity theft and making a false statement to a government agent.
The brothers pleaded not guilty during their arraignment at the United States District Court in Los Angeles on Wednesday afternoon. A federal magistrate judge released Norayr Madadi on a $25,000 bond and Vazrik Madadi on a $50,000 bond. Their trial is set for September 2.
According to the indictment unsealed Wednesday after being returned on June 17, Norayr Madadi allegedly opened fraudulent accounts at Wells Fargo using stolen identities for shell companies and individuals. Between March 2020 and April 2021, the defendants are accused of securing millions through Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) loans by submitting applications with false information about revenues and operations.
The Small Business Administration (SBA) along with PPP participating lenders disbursed these loans into bank accounts controlled by the defendants. Allegedly, the proceeds were spent at casinos or used for luxury purchases such as cars and jewelry.
The FBI is currently investigating this case while Assistant United States Attorney Jason Pang of the General Crimes Section prosecutes it with support from Assistant United States Attorney Ryan Waters of the Asset Forfeiture and Recovery Section.
Anyone who has information regarding attempted COVID-19 related fraud can report it via the Department of Justice’s National Center for Disaster Fraud Hotline or their web complaint form.
