A Burbank resident has admitted to evading more than $11.2 million in federal taxes by using another individual to illegally collect Medicare payments for his blood-testing business, according to the Justice Department.
Armen Muradyan, 60, pleaded guilty on Thursday to conspiracy to commit health care fraud, wire fraud, and tax evasion. Court documents state that Muradyan owned Genex Laboratories Inc., a blood testing lab based in Burbank. Although Medicare paid millions of dollars in reimbursements to Genex for blood testing services, these funds were wired into accounts under the name of “L.S.,” a longtime friend of Muradyan’s who was paid $2,000 per month to pose as the owner of Genex.
Muradyan arranged for L.S. to submit Medicare enrollment paperwork because he himself had been banned from submitting claims. Bank accounts were opened in L.S.’s name but controlled by Muradyan. L.S. did not operate or own Genex and visited the office only to collect payment or sign documents at Muradyan’s request. The proceeds from this scheme were used by Muradyan to pay his mortgage.
From 2015 through 2020, Muradyan directed L.S. to report Genex’s financial activity on L.S.’s personal tax returns using documents showing minimal profit or losses for the company, resulting in little or no income tax liability. Meanwhile, Muradyan filed his own tax returns without reporting any of Genex’s financial activity and claimed an average annual income of $40,000, despite personally receiving millions in Medicare reimbursements.
Muradyan did not file any tax returns between 2021 and 2023. In total, authorities say he failed to report approximately $23.9 million in taxable income, leading to unpaid federal taxes totaling about $11.2 million.
In addition to the tax and health care fraud schemes, Muradyan also admitted that in July 2020 he submitted a fraudulent application for an Economic Injury Disaster Loan (EIDL) funded by federal taxpayers during the COVID-19 pandemic. He falsely claimed that another company he controlled employed multiple people and earned $800,000 in 2019; however, it had no employees or income that year. The U.S. Small Business Administration provided nearly $100,000 based on this false information, which Muradyan used for personal expenses.
United States District Judge John A. Kronstadt set sentencing for December 11. Muradyan faces up to 20 years in prison for wire fraud, up to 10 years for health care fraud conspiracy, and up to five years for tax evasion. He is currently free on a $2.6 million bond.
The investigation was conducted by IRS Criminal Investigation, the FBI, and the Department of Health and Human Services Office of Inspector General.
Assistant United States Attorney Mark Aveis and Trial Attorney Mahana K. Weidler are prosecuting the case.
“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 Hotline at (866) 720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.”
