LOS ANGELES – A NASA-Jet Propulsion Laboratory (JPL) employee has agreed to plead guilty to defrauding a government-sponsored loan program designed to help people and businesses survive the COVID-19 pandemic’s economic impact and has admitted that he used part of the proceeds to fund illegal marijuana cultivation, the Justice Department announced today.
Armen Hovanesian, 32, of Glendale, a cost-control and budget-planning resource analyst for the JPL, a federally funded research and development center operated by the California Institute of Technology for NASA, agreed to plead guilty to a single-count information charging him with wire fraud. Both the information and a plea agreement were filed Thursday in United States District Court. Hovanesian is expected to make his initial court appearance on August 11.
According to the plea agreement, from June 2020 to October 2020, Hovanesian submitted three loan applications in the names of business entities under his control to the Economic Injury Disaster Loan Program (EIDL), a program administered by the Small Business Administration (SBA) that provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters, including businesses impacted by the COVID-19 pandemic.
Hovanesian admitted to making false and fraudulent statements in the loan applications concerning the gross revenues each of the businesses had generated in the preceding year as well as false and fraudulent statements concerning his intended use of loan proceeds.
Hovanesian certified to the SBA under penalty of perjury that he would “use all the proceeds” of the loans for which he applied and caused others to apply for “solely as working capital to alleviate economic injury caused by disaster” consistent with the terms and limitations of the EIDL program. But Hovanesian instead applied those proceeds toward his own prohibited personal benefit to repay a personal real-estate debt and fund his illegal marijuana cultivation. Hovanesian fraudulently caused the SBA to transfer via interstate wire EIDL proceeds totaling $151,900.
After Hovanesian pleads guilty, he will face a statutory maximum sentence of 20 years in federal prison.
The SBA Office of Inspector General and NASA Office of Inspector General are investigating this matter. The United States Secret Service also provided substantial assistance.
Assistant United States Attorney Adam P. Schleifer of the Major Frauds Section is prosecuting this case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.