Federal agents arrest 14 suspects in Los Angeles tied to a $47M COVID relief fraud ring led by Armenian-born individuals.

Early Morning Raid Nets Major Fraud Takedown

Federal authorities arrested 14 individuals in Los Angeles this week in connection with a massive COVID-19 and small business loan fraud scheme. The suspects, predominantly Armenian-born and now naturalized U.S. citizens, are accused of stealing approximately $30 million in federal relief funds through an elaborate network of shell companies and fraudulent documentation.

The coordinated raid, spearheaded by the Department of Homeland Security in partnership with the IRS and the Small Business Administration, was the second such operation in as many weeks targeting transnational crime rings in Southern California. The arrests were executed during a pre-dawn operation involving tactical units, armored vehicles, and specially trained agents.

The key suspect identified in court documents is William McGrayan, an Armenian-born man accused of masterminding the fraud ring. Officers surrounded his residence at sunrise, using an armored vehicle to announce their presence and breach the gate. McGrayan surrendered peacefully, walking out with his hands raised. Informants had previously described him as unstable and connected to gangs in Armenia.

Fraud, Firearms, and Federal Charges

According to the criminal complaint, McGrayan and his co-conspirators submitted forged tax and bank records to secure relief funds intended for struggling American businesses. The ring allegedly applied for $47 million and successfully received about $30 million.

“That’s $47 million in taxpayer funds that was meant to go to good use,” said John Pasciucco, Acting Special Agent in Charge for Homeland Security Investigations in Los Angeles. “These transnational criminal organizations are exploiting the American people's good will and using it for their personal gain.”

Following the arrests, suspects were transported to a secure processing facility. Authorities seized a range of items during the operation, including $20,000 in cash, multiple cell phones and laptops, money-counting machines, currency straps, and two loaded 9mm handguns with ammunition.

The charges brought against the individuals include conspiracy, wire fraud, bank fraud, and money laundering. Some of the ill-gotten funds were reportedly spent on real estate and luxury goods, while other portions were transferred to Armenia, complicating recovery efforts.

One of the suspects is also facing deportation. Officials have indicated that investigations into the ring’s broader connections are ongoing, with more arrests possible as forensic analysis of the digital devices proceeds.

The bust highlights the U.S. government's intensified efforts to pursue those who defrauded pandemic relief programs and signals a warning to similar groups operating both domestically and abroad.