A California family convicted of siphoning $18 million in COVID-19 relief money — cash they poured into a Harley-Davidson, diamonds and luxury homes — has become the poster case for a new Senate bill aimed at stopping fraudsters from simply handing off government money to the relatives they live with. Richard Ayvazyan and his wife, Marietta Terabelian, cut off their court-ordered ankle bracelets and fled the country after their conviction, eventually surfacing in Montenegro before being caught.
Sen. Joni Ernst introduced the bill, formally titled the No Cash for Cohabitating Kins of Crooks Act, on August 6, and it has since been read twice and referred to the Senate Committee on Homeland Security and Governmental Affairs, according to BillTrack50. The measure, numbered S. 5314, would bar people who live with a convicted fraudster from receiving federal grants, loans, subawards, reimbursements and contracts, according to reporting from the New York Post. Ernst, who leads the Senate DOGE Caucus, said her office found fraud schemes involving families across the country and pushed for legislation to cut them off from further government aid, per the same report.
A California Ring That Used Stolen Identities
The Ayvazyan case, first prosecuted in 2021, involved Richard Ayvazyan acting as ringleader alongside Terabelian, his sister-in-law Tamara Dadyan, and another relative, Artur Ayvazyan, all of whom participated in the $18 million scheme, per the Post's account. The family used stolen identities belonging to foreign exchange students, elderly people and dead people to pull off the fraud, the outlet reported. During a November 2021 sentencing hearing, U.S. District Judge Stephen V. Wilson called Richard Ayvazyan an “endemic, cold-hearted fraudster” who “views fraud as an achievement,” according to a Department of Justice statement, and sentenced him to 17 years in prison in absentia after the couple had already fled.
Ayvazyan and Terabelian cut off their electronic tracking bracelets while out on pretrial release and disappeared, only to be extradited back to the United States from Montenegro in November 2022 after 14 months as fugitives, the DOJ said in a separate release. Dadyan followed with her own extradition from Montenegro in February 2023. Richard Ayvazyan is now serving his 17-year sentence, while Terabelian is serving six years, according to the Post's reporting.
Ernst's List of 15 Fraudster Families
The Ayvazyan case is just one entry on what Ernst calls her August Squeal Award, a list highlighting 15 fraudster families her office says stole a combined $50 million from taxpayers, per Ernst's own tally as cited by the Post. “Committing fraud is literally all relative for these families of felons,” Ernst said, adding that “their next scam-ily reunion will be in the slammer.”
Among the other cases on Ernst's list is a Florida family, the Edwardses, who allegedly received approximately $8.4 million after claiming to have more than 500 employees and seeking $6 million from the Small Business Administration's Paycheck Protection Program. Josh Edwards was sentenced to four years and three months in prison this year, though most other Edwards family members were not charged with fraud, and Evan Edwards was found incompetent to stand trial, according to the Post's account.
Another case involves Kelly Lee-Carroll, who claimed she was partially paralyzed and unable to walk while using her sister and son as purported caretakers. Lee-Carroll was sentenced to 17 months in prison, and her son received a 14-month sentence, per the same reporting. A Washington state family took $1.1 million from the Veterans Affairs Administration, and Gandi Yusuf Mohamed and five family members swindled over $10 million from the federal child nutrition program — a program intended to feed 5 million needy children — the Post reported.
Farm Aid Sisters and a Minnesota Nutrition Scheme
Ernst's list also points to a case involving four sisters charged with approximately 115 fraud counts tied to farm discrimination settlement funds. Federal investigators determined the sisters had generally not attempted to farm at all, according to the Post. Separately, Department of Justice records show seven defendants — including four sisters who each received two-year prison sentences — were sentenced in June 2023 for submitting 192 false claims that netted roughly $11.5 million from the USDA, per a Justice Department announcement describing a scheme that involved recruiting non-farmers and filing fraudulent tax returns.
The bill's family-fraud framing echoes other high-dollar cases Hoodline has tracked this year, including a Minnesota sentencing tied to the $250 million Feeding Our Future child nutrition fraud scheme cited in the Senate findings, and an Ohio case in which a former Powell couple was indicted in July for allegedly bilking Medicaid out of $9.3 million through phantom mental health billings before fleeing to Africa, according to the Ohio Attorney General's office. Ernst has said her legislation was directly prompted by investigative reporting showing how convicted Medicaid fraudsters transferred business operations to live-in spouses who opened new agencies out of the same office suites to keep drawing government funds, as reported by The Daily Wire.
Carve-Outs for Domestic Abuse Survivors
The bill is not written as a blanket ban on family members. It includes a carve-out for survivors of domestic abuse and another for spouses who are living separately from a convicted fraudster, according to the Post's reporting. That distinction matters because the legislation's core mechanism — restricting funds for anyone cohabitating with a convicted fraudster — could otherwise sweep up relatives with no role in the underlying crime.
The push arrives amid staggering federal estimates of pandemic-era fraud. A July 2025 Government Accountability Office report estimated that major COVID-19 relief programs suffered more than $300 billion in fraudulent losses, and found that 46 percent of the 1,875 defendants convicted of pandemic fraud through late 2024 faced conspiracy charges, an indicator of heavy involvement by organized groups, according to the GAO. A separate April 2025 GAO analysis found federal prosecutors had publicly charged at least 3,096 individual and corporate defendants with criminal fraud tied to pandemic-relief programs as of the end of 2024, with typical sentences ranging from one to five years in federal prison.
Billions Lost Across Relief Programs
Program-specific estimates paint an equally grim picture. The Small Business Administration's Office of Inspector General estimated potential fraud at $86 billion for the Economic Injury Disaster Loan program and $20 billion for the Paycheck Protection Program, as reported by PBS News, which noted that emergency implementation reduced initial screening requirements for applicants. More broadly, the GAO reported in June that federal improper payments reached an estimated $186 billion in fiscal year 2025, pushing total government-wide payment error estimates to roughly $3 trillion since fiscal year 2003.
Whether Ernst's bill actually closes the loophole it targets will likely depend on how strictly federal agencies define cohabitation and ownership across the sprawling web of federal grant and procurement systems — a distinction that will determine whether the law catches genuine schemes like the Ayvazyans' without also snaring family members who had nothing to do with the fraud.
