A West Hills man pleaded guilty Friday to stealing government funds designed to aid medical providers in the treatment of patients suffering from COVID-19.
Gurgen Israyelyan, 39, also admitted to stealing additional government funds intended to help small businesses during the COVID-19 pandemic, the Department of Justice said in a news release.
Israyelyan said he owned Saint Christopher Hospice Inc., a hospice agency in North Hollywood, which closed around September 2019.
The hospice agency, which was never operational during the COVID-19 pandemic, received approximately $89,162 designated for the medical treatment and care of COVID-19 patients, according to court documents.
Israyelyan admitted that he stole the funds by spending them for his personal use and by transferring them to family members, rather than using the funds in conjunction with pandemic relief efforts as required, the DOJ said.
“The charges against Israyelyan resulted from his intentional misuse of funds distributed from the Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Fund, money specially apportioned by the CARES Act to help health care providers who were financially impacted by the COVID-19 pandemic to provide care to patients who were suffering from COVID-19, and to compensate providers for the cost of that care,” the news release states. “The funds were critical to delivering relief to health care providers and maintaining access to medical care during the pandemic.”
As part of his guilty plea, Israyelyan also admitted that he submitted, or caused to be submitted, five fraudulent Economic Injury Disaster Loan applications to the Small Business Administration on behalf of the hospice agency, and four other entities that he controlled: GMG Holdings LLC, Double G Ventures LLC, One Touch Assistants LLC, and G.I. Construction Group.
As a result of the fraudulent loan applications, the Small Business Administration disbursed approximately $428,100 to Israyelyan, all of which were proceeds that he knew he was not entitled to and which he used for his own personal benefit, the DOJ said.
The Economic Injury Disaster Loan program, which was expanded under the CARES Act, was designed to provide loans to small businesses that suffered substantial economic injury from the pandemic.
Israyelyan pleaded guilty to three counts of theft of government property.
He is scheduled to be sentenced on June 13 and faces up to 10 years in prison for each count.
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.