Yesterday, September 20th, Ara Malkhasyan, a 52-year-old man from the San Fernando Valley, was sentenced to 81 months in federal prison for masterminding a check-kiting scheme that defrauded major banks of over $1.7 million. As details of the scheme relentlessly unfold, they reveal not only a criminal mastermind but a complex web of deceit involving his family, according to a Justice Department announcement.
Back in May 2015 to September 2017, Malkhasyan, along with his wife and other family members, conspired to obtain genuine Armenian passports issued to other individuals and alter them with their own photos. These fraudulent documents were then used to obtain other identity documents and open bank accounts at the victim banks, essentially creating new personas that were crucial to aiding in their deceitful endeavors.
Using these accounts, the conspirators would write bad checks to other fraudulently obtained bank accounts, taking full advantage of bank rules that allowed them to quickly transfer money between accounts before the banks could recognize and respond to the fake checks. The scheme ultimately allowed them to unlawfully acquire more than $1.3 million from Bank of America alone, as reported by the Justice Department.
In a separate scheme that occurred back in April 2017 and May 2019, Malkhasyan and his brother-in-law, Smbat Khechumyan, engaged in a similar series of check forgeries. This time, one of them would open a Wells Fargo account using a stolen Armenian passport or other counterfeit documents, deposit forged checks into that account, and then withdraw funds at ATMs in Las Vegas casinos. This continued deception led to a loss of over $400,000 for Wells Fargo.
Khechumyan, who pleaded guilty to one count of conspiracy to commit bank fraud and one count of aggravated identity theft last year, is currently serving a two-year prison sentence for his crimes. Meanwhile, Sveta Khechumyan, Malkhasyan's wife and Smbat's sister, also pleaded guilty to similar charges. She is scheduled to be sentenced on November 3rd.
In total, prosecutors have secured nine guilty pleas in this case, indicating that the scope of the criminal conspiracy was not limited to only a few desperate individuals. The intricate and far-reaching nature of the case raises questions about the security of both our financial institutions and, more broadly, the value of trust in our society. How is it possible for a single family to execute such a complex criminal enterprise, and what can we learn from their unraveling downfall?
The thorough investigation that led to the successful apprehension of these parties was conducted by Homeland Security Investigations, with significant assistance from the Los Angeles Police Department, Los Angeles County Sheriff's Department, and the FBI.
