8 residents of Los Angeles' San Fernando valley arrested in check-kiting scheme that allegedly defrauded banks out of nearly $1.5 million
Federal authorities this morning arrested eight people named in a federal grand jury indictment that alleges check-kiting schemes that used hundreds of altered Armenian passports to fraudulently open bank accounts and steal nearly $1.5 million from Bank of America and Wells Fargo. A ninth defendant in this case is currently being sought by authorities.
The investigation led by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) found that the defendants obtained genuine Armenian passports issued to other people, altered the passports to include the photos of the defendants, and used the fraudulent documents to obtain other identity documents and to open bank accounts at the victim banks.
The 36-count indictment unsealed today alleges that the defendants used the bank accounts, which were opened in the names that appeared on the altered passports, to write bad checks to other fraudulently obtained bank accounts. The defendants allegedly exploited bank rules that allowed them to transfer money from one account to another, and then to immediately withdraw funds at ATMs in Las Vegas casinos and other locations before the checks bounced.
The indictment alleges that the defendants used 331 fraudulently altered Armenian passports to steal, or attempt to steal, $1,556,336 from Bank of America. They actually obtained approximately $1.12 million.
Three of the defendants were also charged with perpetrating a similar fraud scheme against Wells Fargo that resulted in a loss of approximately $370,000.
The defendants arrested this morning are:
Ara Malkhasyan, 48, of Winnetka;
The defendants arrested today are expected to be arraigned on the indictment this afternoon in U.S. District Court in downtown Los Angeles.
The indictment charges all of the defendants with conspiracy to commit bank fraud, a charge that carries a statutory maximum penalty of 30 years in federal prison. Additionally, all of the defendants are charged in at least one substantive count of bank fraud and aggravated identity theft.
During this investigation, HSI received substantial assistance from the Los Angeles Police Department and he Los Angeles County Sheriff’s Department.
This matter is being prosecuted by the U.S. Attorney, Central District of California’s Major Frauds and General Crimes Sections.