A former banker from Wells Fargo & Co. and his brother have been apprehended following an eight-count federal grand jury indictment. The indictment alleges they fraudulently acquired over $2.7 million in COVID-19 relief funds and federally-guaranteed small business loans by using stolen identities of developmentally disabled individuals residing in long-term care facilities, as announced by the Justice Department.
Norayr Madadi, aged 40, from Burbank, and Vazrik Madadi, aged 44, from Glendale, were arrested on Wednesday morning. They face charges including one count of conspiracy to commit wire fraud, two counts of wire fraud, and three counts of money laundering. Norayr Madadi also faces charges for aggravated identity theft and making a false statement to a government agent.
Both men pleaded not guilty during their arraignment in the United States District Court in Los Angeles on Wednesday afternoon. A federal magistrate judge set Norayr Madadi’s bond at $25,000 and Vazrik Madadi’s bond at $50,000 while scheduling their trial for September 2.
The indictment unsealed on Wednesday details that Norayr Madadi was employed as a banker at Wells Fargo where he allegedly opened fraudulent accounts under shell companies and used stolen identities. Between March 2020 and April 2021, the defendants reportedly secured millions through Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) loans by submitting applications with false information regarding revenues, operations, and employees.
The Small Business Administration (SBA) along with PPP participating lenders disbursed these loans into bank accounts managed by the defendants. These included accounts at Wells Fargo opened by Norayr Madadi. The funds were allegedly spent on casinos, luxury cars, jewelry purchases, and cash withdrawals.
Law enforcement estimates the scheme resulted in losses amounting to approximately $2.7 million.
An indictment serves as an allegation that a crime has been committed; all defendants are presumed innocent until proven guilty in court.
If convicted on wire fraud-related counts, each defendant could face up to 20 years in federal prison per count and up to 10 years for each money laundering count. Additionally, Norayr Madadi could receive up to five years for false statements and a mandatory two-year consecutive term if convicted of aggravated identity theft.
The FBI is conducting the investigation into this matter.
Assistant United States Attorney Jason Pang from the General Crimes Section is leading the prosecution with significant support from Assistant United States Attorney Ryan Waters of the Asset Forfeiture and Recovery Section.
For those with information about attempted COVID-19 related frauds can report it via the Department of Justice’s National Center for Disaster Fraud Hotline or through their web complaint form.
