Two brothers, former Wells Fargo & Co. banker Norayr Madadi, 40, of Burbank, and Vazrik Madadi, 44, of Glendale, have been charged in a case involving the misappropriation of more than $2.7 million in COVID-19 relief funds. As reported by the Justice Department, the brothers allegedly used stolen identities, including those of developmentally disabled individuals in long-term care, to fraudulently obtain Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) loans.
The indictment, unsealed this week, accuses the Madadi brothers of one count of conspiracy to commit wire fraud, two counts of wire fraud, and three counts of money laundering. Norayr Madadi faces additional charges of aggravated identity theft and making a false statement to a government agent. Although they pleaded not guilty in the U.S. District Court in Los Angeles, if convicted, both could see substantial prison time, a statutory maximum of 20 years for each wire fraud-related count and up to 10 years for each count of money laundering. Furthermore, Norayr could face an additional five years for the false statements count, and a mandatory two-year term for the identity theft count.
Law enforcement has alleged that the brothers opened fraudulent bank accounts through Wells Fargo for shell companies and misappropriated identities to facilitate their scheme from March 2020 to April 2021. Funds meant to aid businesses during the unprecedented pandemic were instead spent on personal luxuries such as casino visits, luxury cars, and jewelry. A press release from the U.S. Attorney's Office for the Central District of California, cited by Justice.gov, detailed these allegations, emphasizing the impact of such fraudulent behavior on the integrity of programs meant to support struggling entities during the health crisis.
The case is currently being prosecuted by Assistant United States Attorney Jason Pang of the General Crimes Section, with Ryan Waters of the Asset Forfeiture and Recovery Section providing substantial assistance. The duo was arrested Wednesday and released on bond, with a trial date set for September 2. The FBI is investigating this matter, and the Department of Justice is urging anyone with information related to COVID-19 fraud to report it through their established channels. According to the same press release, this case not only underscores the vigilance required in times of national emergency but also the need to protect resources intended for the most vulnerable sectors of our society.
