Two brothers from Southern California, including a former Wells Fargo banker, have been indicted on federal charges for allegedly stealing millions in COVID-19 relief funds using fraudulent loan applications and the stolen identities of vulnerable individuals.
The U.S. Department of Justice announced the arrests of Norayr Madadi, 40, of Burbank, and Vazrik Madadi, 44, of Glendale, following their indictment by a federal grand jury on eight felony counts related to conspiracy, wire fraud, money laundering, identity theft, and false statements.
Stolen Identities of Disabled Victims Used in Fraud
Prosecutors say the Madadi brothers submitted fraudulent applications for Paycheck Protection Program (PPP) loans and other federally guaranteed small business aid intended to support struggling businesses during the COVID-19 pandemic.
Disturbingly, the indictment alleges that they used stolen identities of developmentally disabled individuals—some of whom were living in long-term care facilities—to support the fake applications.
The loan proceeds, estimated at approximately $2.7 million, were allegedly disbursed into Wells Fargo accounts opened by Norayr Madadi. Instead of using the funds for legitimate business needs, the brothers reportedly spent the money on casinos, luxury cars, jewelry, and cash withdrawals, according to the Justice Department.
Indictment Details and Charges
Both Norayr and Vazrik Madadi face the following charges:
1 count of conspiracy to commit wire fraud 2 counts of wire fraud 3 counts of money laundering
In addition, Norayr Madadi faces:
1 count of aggravated identity theft 1 count of making a false statement to a government agent
The brothers were arraigned in U.S. District Court in Los Angeles on Wednesday afternoon and both pleaded not guilty to all charges. A federal magistrate judge granted $25,000 bond for Norayr and $50,000 bond for Vazrik. A September trial date has been scheduled.
Potential Penalties
If convicted, each defendant faces:
Up to 20 years in federal prison for each wire fraud-related charge Up to 10 years for each money laundering charge Up to 5 years for the false statement charge (Norayr only) A mandatory two-year consecutive sentence for aggravated identity theft (Norayr only)
Ongoing Investigation
The FBI is leading the investigation, and the case is being prosecuted by Assistant U.S. Attorney Jason Pang of the General Crimes Section.
The Justice Department emphasized that the charges are only allegations and that all defendants are presumed innocent until proven guilty in court.
