The U.S. Department of Justice announced the arrest of 14 individuals on May 28, 2025, for their alleged involvement in a scheme to fraudulently obtain more than $25 million in COVID-19 relief funds intended for small businesses. These arrests stem from two federal criminal complaints charging a total of 18 defendants, with the remaining four believed to be abroad.
According to the DOJ, the defendants conspired to submit fraudulent applications to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. These federal programs were created to provide critical financial support to small businesses struggling during the pandemic. The complaints allege that the defendants falsified information related to payroll, revenues, and business operations, and submitted forged tax documents to obtain funding.
Vahe Margaryan, also known as William McGrayan, 42, of Tujunga, California, is identified as the alleged ringleader. Authorities claim that he and others laundered the fraudulently obtained funds through shell companies and structured cash transactions to evade federal reporting requirements. The charges against the defendants include conspiracy to commit wire fraud, bank fraud, money laundering, and structuring.
Officials emphasized that fraudulent misuse of pandemic relief funds harms both taxpayers and legitimate small businesses. The Department of Justice and the Small Business Administration’s Office of Inspector General are continuing to investigate and prosecute these crimes aggressively to protect the integrity of federal aid programs.
This case serves as a stark reminder that pandemic relief programs are subject to strict oversight and that those who attempt to exploit them will face serious legal consequences.